"We have closed the border and we hope the Iraqi authorities will act as quickly as possible to release our colleague," Esmaeel Najar, the governor of Iran's northwestern Kurdistan province told AFP.

Mahmudi Farhadi was taken from a hotel in the regional capital Sulaimaniyah on Thursday by US forces which accused him of being a member of the covert operations section of Iran's elite Revolutionary Guards.

Iran however has insisted the man is a commerce official at the governor's office in Iran's Kermanshah province and was travelling as a member of a commercial delegation.

"We had said that if he was not freed rapidly, we would reconsider our commercial ties" with Iraqi Kurdistan, added the governor.

Asked when the border would be reopened, he replied: "We hope that the Iraqi authorities will act as swiftly as possible to free our colleague."

Iraqi Kurdistan has land borders with Iran's West Azarbaijan, Kurdestan and Kermanshah provinces.