The Bush administration has authorised creation of an Iraqi intelligence service to target people attacking American forces and Iraqi officials.

The spy service will be trained, financed and equipped largely by the Central Intelligence Agency with help from Jordan, US government officials told The Washington Post.

The service, which will include former officials of Saddam Hussein's regime who are deemed reliable, will initially be headed by Iraqi Interior Minister Nouri Badram, a member of the Jordan-based former exile group, Iraqi National Accord.

INA leader Ayad Alawi and Bodran have spent most of the week at CIA headquarters at Langley, Virginia, to work out the details of the new service, which officials hope to have running by mid-February.

In order to screen former intelligence officials, the daily said, the CIA has flown polygraph machines to Iraq.

Some Pentagon officials and Ahmed Chalabi, head of the Iraqi National Congress, have, however, opposed allowing former intelligence and military officials into the new organisation for obvious reasons.

The funds for the Iraqi intelligence service have been approved by the US Congress in a classified annex to the 2004 budget.