"We have closed the border and we hope the Iraqi authorities will act as quickly as possible to release our colleague," Esmaeel Najar, the governor of Iran's northwestern Kurdistan province, told the AFP news agency on Monday.

Iran says the man is a commerce official at the governor's office in Iran's Kermanshah province and was travelling as part of a commercial delegation.

"We had said that if he was not freed rapidly, we would reconsider our commercial ties" with Iraqi Kurdistan, Najar said.

US accusations

The US military has accused the man of being a member of the the Revolutionary Guards' Quds force, smuggling roadside bombs into Iraq and training foreign fighters.

"This kind of action violates the sovereignty of Iraq ... this is an example of American mistakes in Iraq" Hassan Kazemi Qomi, Iran's ambassador in Baghdad

When asked when the border would be reopened, Najar replied: "We hope that the Iraqi authorities will act as swiftly as possible to free our colleague."

Mohammed Raouf, Iraqi Kurdistan's trade minister told Reuters news agency: "Iran is setting up pressure in a bid to release its citizens detained by American [forces]"

Earlier this year, US forces arrested five Iranians in the Kurdish city of Arbil. Iran says the men are diplomats but Washington says they were supporting fighters targeting US forces in Iraq.

Hassan Kazemi Qomi, Iran's ambassador in Baghdad, accused the US military of riding roughshod over Iraq's sovereignty.
  
"This kind of action violates the sovereignty of Iraq," he said. "This is an example of American mistakes in Iraq."

Iraqi Kurdistan shares a border with Iran's West Azarbaijan, Kurdestan and Kermanshah provinces.

Price rises

Raouf complained that shutting the border would cost the Kurdistan regional government about $1m day.
   
"Closing the borders by Iran will create a spike in prices of imported commodities, like kerosene and foodstuffs," he said.

A spokesman for the Kurdistan regional government (KRG) said he hoped the closure was only temporary.
   
"The KRG will co-operate with the central government in Baghdad to cope with this crisis by importing commodities through other points outside Kurdistan," Jamal Abdulla, government spoeksman, said.
   
"It is hard for the KRG to find other alternatives. Iran is the closest to us."