"Similar, baseless accusations concerning Russia's intelligence have been made more than once," foreign intelligence service spokesman Boris Labusov said on Saturday. "We do not consider it necessary to comment on such fabrications."

An unclassified Pentagon report released on Friday cited two captured Iraqi documents that say the Russians collected information from sources "inside the American Central Command" and that battlefield intelligence was provided to Iraqi leader Saddam Hussein through the Russian ambassador in Baghdad.

The report also said the Russian government had sources inside the American military command as it planned and executed the invasion of Iraq in 2003.

Pavel Felgenhauer, a respected independent Moscow-based military analyst, said on Friday the report was within the realm of possibility.

"It is quite plausible," he told The Associated Press.

He said a unit affiliated with the defence ministry's main intelligence department, known by its abbreviation GRU, was actively working in Iraq at the time of the US invasion of Iraq. The unit apparently was shut down after the fall of Baghdad.

He said at that time there was an internet site in Russia called The Ramzay Files that caused a stir in Moscow's military and diplomatic community.

The site, which was shut down after the invasion, posted striking insights, predictions and analysis into US military activities as well Iraqi military and intelligence activities, he said.

He said former GRU officials told him that the type of information that was being posted - both on the Iraqis and on the Americans - appeared to be the kind of information that only highly placed Russian intelligence officials in Iraq would have had access to.