The claim is made in "The CIA at War" by Ronald Kessler, an investigative reporter and author of several books about the CIA and the FBI, who also describes espionage activity in Iraq that supported the March invasion that unseated President Saddam Hussein.
Kessler interviewed CIA Director George Tenet in May and other senior CIA officials for his book. The agency supplied most of the photographs in the book, which was made available to Reuters news agency ahead of its October publication.
"In Islam, as in many other religions, anyone can call himself a religious leader," he said in the book. "So, besides paying mullahs, the CIA created fake mullahs - recruited agents who would proclaim themselves clerics and take a more moderate position about nonbelievers."
"We are taking over radio stations and supporting clerics," a CIA source was quoted as saying. "It's back to propaganda. We are creating moderate Muslims."
Kessler said the CIA also paid for mullahs to issue fatwas, or religious edicts, urging Iraqis not to resist American forces. He did not specify the countries this took place in.
Eyeball on Iraq
He said the CIA planted tiny video cameras to track former Iraqi President Saddam Hussein, his sons, and other officials, and monitor the position of Iraqi troops and suspected weapons of mass destruction facilities.
The CIA and US Special Forces paid Iraqi guards who protected the oil wells to snip wires to explosive devices after the war began.
Electronic beacons were attached to the undersides of cars that Saddam might use and radar-imaging sensors were dragged across the ground to look for hidden underground bunkers and storage facilities, the book said.
He did not say exactly when such activities took place.
Shedding light on how a major pre-war threat was averted - that Saddam would blow up his oil wells - Kessler says the CIA and US Special Forces paid Iraqi guards who protected the wells to snip wires to explosive devices after the war began.
To communicate with Iraqi agents the CIA gave them devices such as satellite phones hidden in rifles and laptop computers with programs hidden in innocuous games or graphics that could send and receive encrypted documents, he said.
The CIA also used a secret writing technique dating to biblical days, in which Iraqi agents wrote over innocuous letters to aunts or mothers through a second piece of paper treated with chemicals, and the hidden message would show up when placed under a special light, according to the book.
Tenet was quoted as saying it was up to him to accept responsibility for any mistakes related to the 11 September, 2001, attacks and not blame specific employees as some in Congress had requested. Otherwise it could discourage the risk-taking essential to the CIA's mission.
"Nobody is perfect"
"If you think this is about protecting your image or yourself, you're finished. Forget it," Tenet was quoted as saying.
"Nobody is perfect. But guys who have never run anything in their lives, who have never taken any risk in their lives, who have never managed a large work force, will tell you how to suck eggs and how to do your job on a daily basis. If you listen to them, you're listening to the wrong people," he said.
Kessler said the CIA used operatives from intelligence services in Arab countries including Jordan, Syria, and Egypt to infiltrate al-Qaida, develop intelligence, but also sow suspicion so members of the network would kill each other, the book said. Al-Qaida was blamed for the 11 September attacks.