"Iran is fighting a proxy war in Iraq," a senior US official in Baghdad said. "They are already committing daily acts of war against US and British forces.
"They are behind a lot of high-profile attacks meant to undermine US will and British will, such as the rocket attacks on Basra palace and the Green Zone. The attacks are directed by the Revolutionary Guard who are connected right to the top (of the Iranian Government)."
The official said US commanders were bracing themselves for a nationwide, Iranian-orchestrated offensive, linking al-Qaeda and Sunni insurgents to Tehran's Shiite militia allies, who Iran hoped would trigger a political mutiny in Washington and a US retreat.
The official warned of a determined campaign by the insurgents before US commander General David Petraeus reports to Congress on President George Bush's security "surge".
"We expect that al-Qaeda and Iran will both attempt to increase the propaganda and increase the violence prior to Petraeus' report in September," the official said.
"Certainly it (the violence) is going to pick up from their side. There is significant latent capability in Iraq, especially Iranian-sponsored capability. They can turn it up whenever they want.
"You can see that from the pre-positioning that's been going on and the huge stockpiles of Iranian weapons that we've turned up in the past couple of months. The relationships between Iran and groups like al-Qaeda are very fluid."
Iran has maintained close links to Iraq's Shiite political parties and militias but has previously eschewed collaboration with al-Qaeda and Sunni insurgents. US officials now say they have firm evidence that Tehran has switched tack as it senses a chance of victory in Iraq.
The official said Tehran's strategy to discredit the US surge and foment a congressional revolt against Mr Bush was not confined to the Shiite south, its traditional sphere of influence.
It included stepped-up co-ordination with Shiite militias such as Sheikh Muqtada al-Sadr's Mahdi Army as well as Syrian-backed Sunni Arab groups and al-Qaeda in Mesopotamia, he said.
Iran was also expanding contacts across the board with paramilitary forces and political groups, including Kurdish parties such as the PUK, a US ally.
"Iran is playing all these different factions to maximise its future control and maximise US and British difficulties.
"Their co-conspirator is Syria, which is allowing the takfirists (fundamentalist Salafi jihadis) to come across the border."
Any US decision to retaliate against Iran on its own territory could be taken only at the highest political level in Washington, the official said. But he indicated that American patience was wearing thin.
A senior Bush Administration official in Washington said:
"Tehran is behaving like a racecourse gambler. They're betting on all the horses in the race, even on people they fundamentally don't trust. They don't know what the outcome will be in Iraq, so they're hedging their bets."
Talk Show America 5/24/2007
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