Mustafa Sayyed Qader, deputy commander of the peshmerga, the Kurdish militia of the Patriotic Union of Kurdistan, told AFP Iranian forces crossed the border to attack a customs post of the rebel Kurdistan Workers Party.

The PKK, which has been waging a guerrilla war against Turkey, is based in northern Iraq's Mount Qandil area, together with the anti-Iranian Party of Free Life in Kurdistan (PJAK).

"A number of Iranian forces crossed into Iraqi territory Saturday morning in the Nowzang border area," said Jingawr, a PKK leader who goes by a single name.

"A force of PJAK atacked them and the clashes continued for an hour until Iranian forces withdrew to their posts inside their own territory."

Iran, which has its own Kurdish minority, has been battling infiltrations by PJAK for more than a year.

Iran is bound by treaty with Turkey to fight the PKK. In return, Turkey is under a pledge to fight the Iranian armed opposition group, the Iraq-based People's Mujahedeen. That group was effectively neutralised when it surrendered its arms to US forces following the 2003 invasion to unseat Saddam Hussein.

PJAK, which has close ties with the PKK, was formed in the late 1990s and describes itself as struggling for the Kurdish identity in Iran as well as for democracy.

Both groups have bases in northern Iraq.

Jingawr said that there were no PJAK casualties, nor were they aware of any Iranian casualties.