In an interview with "The Washington Post" in Jeddah, the Saudi Foreign Minister Prince Saud al Faysal said that Iranian authorities handed over the al Qa’eda fugitives, all Saudis, knowing that whatever intelligence was obtained from them during interrogation in Saudi Arabia would be passed on to the United States for use in the war against terrorism.

"The co-operation from Iran is significant because the Bush administration has listed the country as part of an "axis of evil," along with Iraq and North Korea", the paper’s Peter Finn said.

In the opinion of most Iranian observers, Mr. Faysal, a seasoned diplomat, has tried to kill three birds with one stone using the paper correspondent’s "innocence": Strengthening Tehran-Riyadh relations at a time that both have difficulties in their relations with Washington; engaging in a charm offensive with both Iranian ruling ayatollahs and the US administration as an honest broker and fight the growing anti-Saudi propaganda in the US.

Tehran’s policy was to systematically deny American allegations that after the collapse of the Taleban in Afghanistan, al-Qa’eda terrorists have crossed the borders with Iran.

But when Afghanistan American and United Nation’s-installed interim Prime Minister Hamed Karzai went to Iran, he carried with him documents provided by his friend Khalilzad proving beyond any doubt the presence on Iranian soil of members of the terrorist organisation.

Prince Saud told to The Washington Post that a group of Saudi officials, led by a senior intelligence official, travelled to Tehran in May to question 16 al Qa’eda fighters who were detained there, along with four women and six children, after crossing from Afghanistan. They left Iran in June on a Saudi government jet.

"We asked [the Iranians] to hand them over and they did", the Prince said. "Iran has not only co-operated with Saudi Arabia in this conflict in Afghanistan but co-operated extensively with the United States", he added.

The June transfer to Saudi Arabia is the latest sign of improving ties between Iran and Saudi Arabia, which had a history of strained relations after the 1979 Iranian revolution. But Saud suggested that Iran has also worked directly with the United States to combat al Qa’eda. He declined to provide details.

"Verifying that they belong to al Qa’eda, or any other information related to them, is the responsibility of those countries", he added.

"The U.S. and Iran can speak for them as to how much co-operation happened between the two countries", he said.

During the inter-Afghan conference in Bonn last November, Iran at first tried to sabotage the meeting, but after being warned that it could be thrown out of the conference, it changed attitude and became co-operative in the installation of Mr. Hamed Karzai as first interim Prime Minister.

Senator Fred Thompson, a Tennessee Republican and member of the Senate Intelligence Committee, earlier played down the reported cooperation.

"This is one instance that serves the purposes of the Saudis and also the Iranians," he told the "Fox News Sunday" program.

Prince Saud argued that Saudi Arabia's standing in the Islamic world benefits the United States, opening up avenues of intelligence that might otherwise be closed to Washington, such as the pipeline from Tehran, confirming the views of Iranian political analysts.

"One reason Mr. Saud is revealing Iranian co-operation with the United States now maybe that Tehran, which is under siege from the Bush Administration, might have asked him to help", the Iranian scholar noted, referring to president Bush’s characterisation of the Islamic Republic as an "evil State" alongside North Korea and Iraq.

According to Mr. Saud, intelligence sharing is just one example of U.S.-Saudi co-operation that is brokered through a five-year-old joint counter-terrorism committee. The prince said the United States is receiving extensive co-operation from Saudi Arabia, and the flow of information to Washington, he argued, belies the criticism of the kingdom that has emanated from some quarters in Washington.

The briefer, a Rand Corp. analyst, charged that "the Saudis are active at every level of the terror chain from planners to financiers, from cadre to foot soldier, from ideologist to cheerleader."

The Pentagon and White House quickly disowned the briefing, which was given to the Defence Policy Board, a group of intellectuals and former senior officials.

Saud said the criticism of his country was unfair and inaccurate. He noted that the counter-terrorism committee was set up five years ago and that its work has intensified in the past 10 months. And the former head of Saudi intelligence, Prince Turki Faisal, said in a separate interview that combating al Qa’eda had topped the committee's agenda for years.

Saud called the charges baseless and said the hundreds of millions of dollars the kingdom has extended to the Palestinians was given to the Palestinian Authority, which is also a major recipient of aid from the European Union. Moreover, he said, the Saudi government has cut off financing to all groups that it has identified as advocating terrorism.

Saud also noted that al Qa’eda is a sworn enemy of the Saudi government that wants to crush the ruling monarchy and sever the country's relations with the United States.

"It would be the ultimate of contradictions that we finance those who are trying to do harm to our country, but these [facts] seems to be left aside or disregarded," he said.

"That we are a Muslim country. Undeniable," said the prince. "That we are the centre of Islam. Undeniable. That we have two holy mosques here. Undeniable. That we are interested in the well being of the Muslim community in the world. Undeniable. But to calculate that and make it somehow an evil scheme against the United States, of all countries -- a country with whom we have shared many common struggles and faced many common adversaries in the past, and I am sure we will do [again] in the future -- it's something ridiculous".

Saudi Arabia’s refusal to allow American forces use Saudi bases for any attack on Iraq aimed at toppling President Saddam Hoseyn is another bone in Riyadh-Washington Relations.

When he visited briefly Tehran earlier this month, Prince Saud and his Iranian counterpart opposed any military move against Iraq, a country that attacked both of them.

British newspapers also reported growing trade exchanges between Saudi Arabia and Iraq.

The Saudi Government, which was host to 500,000 American troops for Operation Desert Storm in 1991, has been engaged in talks with Iraq that could result in the establishment of a free-trade area between the two countries, according to same sources.

"The growing rapprochement between Riyadh and Baghdad, at a time when the Pentagon is weighing up the military options for toppling President Saddam Hussein, has underlined the huge changes in the region’s political environment since the previous US-led campaign against Iraq", the paper added on 7 August.

Intelligence sources said that the United States had "as good as eliminated Saudi Arabia" as a base for operations against Saddam. The al-Udeid base in Qatar, about 20 miles from the capital, Doha, is being expanded and is expected to be the control centre for US air operations.