Iran announced Wednesday it was holding senior members of the Al Qaeda terror network and will hunt down any others on its soil, while the United States demanded it turn over any prisoners to face justice.

Tehran's announcement came just days after President Bush accused it of harboring terrorists. Iran's government has long said Al Qaeda operatives are in its prisons, but this was the first word that some prisoners held high positions in Usama bin Laden's terror network -- blamed for the Sept. 11 attacks and for suicide bombings this year at Western housing complexes in the Saudi capital, Riyadh.

"A large number of small- and big-time elements of Al Qaeda are in our custody," Intelligence Minister Ali Yunesi (search) told reporters.

He did not identify any of the detainees or comment on media reports that Iran holds Al Qaeda's No. 2, Ayman al-Zawahri (search), the group's spokesman Suleiman Abu Ghaith (search), or its security chief Saif al-Adil (search).

The Bush administration said it could not confirm Yunesi's comments and questioned whether Al Qaeda members in Iran were in prison or being harbored by the government.

Still, White House spokesman Scott McClellan said "the statements would appear to confirm what we and others believe to be a significant Al Qaeda presence in Iran to include members of its senior membership."

"These terrorists, we've made very clear, must be brought to justice," McClellan said.

State Department spokesman Richard Boucher said Iran "needs to deport these people either to jurisdictions where they're wanted for crimes, or to their home countries."

Boucher said the status of the suspects -- imprisoned or not -- is "not always clear," but "what is important is that they not be allowed to operate in any way there, and in fact, that they be expelled to the appropriate jurisdictions."

Secretary of State Colin Powell called it "significant" that Iran had acknowledged the presence of Al Qaeda people and detained them.

U.S. officials have said intelligence suggests that senior Al Qaeda figures and associates in Iran include some of the leading Al Qaeda operatives at large: Saif al-Adil, possibly connected to the May 12 bombings in Riyadh; Abu Mohamed al-Masri, wanted in connection with the 1998 U.S. Embassy bombings in East Africa; Abu Musab Zarqawi, the U.S. administration's key alleged link between Al Qaeda and Saddam Hussein; and Usama bin Laden's son Saad.

U.S. counterterrorism officials doubt press reports that al-Zawahri is in Iran, saying they believe he is with bin Laden somewhere along the Afghan-Pakistani border. Officials have not commented on whether they believe Abu Ghaith, Al Qaeda's spokesman, is in Iran.

The White House on Monday repeated its accusations that Iran and Syria harbor terrorists, a charge both countries deny.

Iranian officials insist they are pursuing Al Qaeda figures and announced several months ago they had an undisclosed number in custody. They later said they had identified the Al Qaeda members, but never announced names.

"Wherever we learn of some clues about people connected to Al Qaeda, we launch intelligence operations and arrest them. We are firm on this because we consider it our duty to do so," Yunesi said at a press conference after a Cabinet meeting.

Iran said last month it was holding talks with foreign intelligence services, including Britain's, over the fate of its detained Al Qaeda members.

Iran has also said it would hand over to Saudi Arabia any of its nationals among the detained suspects.

Earlier this year, Iran said it had extradited more than 500 Al Qaeda members to their homelands -- including Arab, European and African countries. Many Al Qaeda operatives are believed to have fled to Iran after the overthrow of the Taliban regime in neighboring Afghanistan in late 2001.

Yunesi said the crackdown on Al Qaeda was not in response to pressure from Washington.

"We don't do it to appease this or that. We deal firmly with them because we consider it our national duty," Yunesi told reporters.

He also accused the United States of giving refuge to the Iranian armed opposition group, the Mujahedeen Khalq, which is based in Iraq.

"The U.S. differentiates between good and bad terrorists. If a terrorist group spies for them like the hypocrites, then they are good terrorists," he said. Iran usually refers to members of the Mujahedeen Khalq as hypocrites.

The Mujahedeen, once supported by Saddam and declared a terrorist group by Washington, has begun turning in its weapons under a U.S. surrender agreement reached after American forces ordered it to lay down arms or face attack.