Iraq issues arrest warrants for Ahmad Chalabi

Iraq has issued arrest warrants for Ahmad Chalabi, a former Governing Council member with strong US ties, on counterfeiting charges.

Iraq has issued arrest warrants for Ahmad Chalabi, a former Governing Council member with strong US ties, on counterfeiting charges, and for his nephew Salem Chalabi - head of the tribunal trying Saddam Hussein - on murder charges, Iraq's chief investigating judge said.

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A long-time Iraqi exile opposition leader, Ahmad Chalabi had been a favourite of many in the Pentagon but fell out with the US in the weeks before the occupation ended in June.

Both men denied the charges, dismissing them as part of a political conspiracy against them and their family.

Salem Chalabi, named as a suspect in the June murder of Haithem Fadhil, director general of the finance ministry, called the accusation "ridiculous." His uncle said the charges were "outrageous" and "manufactured lies."

In Washington, the Bush administration had no comment. "This is a matter for the Iraqi authorities to resolve and they are taking steps to do so," said White House spokeswoman Suzy DeFrancis.

The warrants accused Ahmad Chalabi of counterfeiting old Iraqi dinars, which were removed from circulation after the ouster of Saddam's regime last year.

Iraqi police backed by US troops found counterfeit money along with old dinars during a raid on Chalabi's house in Baghdad in May, Judge Juhair al-Maliky said.

"I'm now mobilised on all fronts to rebuff all these charges," Ahmad Chalabi told CNN from Tehran. "Nobody's above the law, and I submit to the law in Iraq ... Despite my serious and grave reservations about this court."

"I don't think ... that I had anything to do with the charges so I'm not actually worried about it," Salem Chalabi told CNN from London.