The shells were apparently aimed at bases of Kurdish rebel group Pejak (Party of Free Life of Kurdistan), said the mayor of Zarawah, a frontier town in northeastern Iraq.

Pejak is accused by Tehran of launching deadly attacks on security forces in northwestern Iran.

"Iranian troops fired artillery shells at border villages inside Iraq," mayor Azad Wassu, under whose jurisdiction the villages fall, told AFP, adding the attack lasted 30 minutes and seven villages were hit.

He added residents were terrified by the shelling.

Zarawah is near the major town of Qalat Dizhan, about 160 kilometres (100 miles) north of the city of Sulaimaniyah in Iraq's autonomous Kurdish region.

Iran in September confirmed for the first time it had fired artillery shells on camps of Kurdish militants inside northern Iraq, saying the local authorities had heeded its warnings.

The shelling, in August, sent hundreds of Iraqi Kurds fleeing remote mountain villages near Iraq's eastern frontier.

Pejak is linked to Turkey's outlawed Kurdistan Workers' Party (PKK).

Earlier this month, Iraq and Turkey pledged to take measures against PKK rebels in northern Iraq during talks to soothe tensions following a Turkish cross-border offensive against the militants.

Turkey charges that more than 2,000 PKK militants use northern Iraq as a base for their separatist campaign against Ankara and accuses Iraqi Kurds of tolerating the rebels.