The Bush administration's claims of ties between Saddam Hussein's regime and Al Qaeda (search) terrorists are being tested in federal court, where the family of the FBI's late counterterrorism chief has sued Iraq over the Sept. 11 hijackings.

The wife and children of John O'Neill (search), who died in the attack on the World Trade Center, allege that Iraq began communicating with Al Qaeda as early as 1992, provided training to Usama bin Laden's warriors and sent intelligence agents to work with the terror network in Afghanistan.

The suit accuses Iraq of complicity in the Sept. 11 attacks by providing support to terrorists, and seeks $1 billion in damages.

The Associated Press reported over the weekend, based on interviews with intelligence officials, that the Bush administration has evidence of contacts between Iraqi intelligence and Al Qaeda but no proof of direct Iraqi sponsorship of Al Qaeda attacks.

The evidence, the sources said, includes statements by Iraqi defectors and Al Qaeda prisoners that Iraqi intelligence provided Al Qaeda with training in document forgery and chemical and biological weapons in a series of contacts that spiked in 1996, and again after 1998.

In its lawsuit, which was filed quietly last month in U.S. District Court, the O'Neill family says its information was gleaned from documents uncovered in Afghanistan and Iraq as recently as a few months ago, as well as information from interrogations of Al Qaeda and Iraqi prisoners.

For instance, the lawsuit alleges that bin Laden's top deputy, Ayman al-Zawahri (search), visited Baghdad in 1992 and 1998, and that contact between Iraq and Al Qaeda increased markedly in 1998, the year the terror network bombed two U.S. embassies in Africa.

"Documents recently found in the bombed headquarters of the Mukhabarat, Iraq's intelligence service, reveal that an Al Qaeda envoy was invited clandestinely to Baghdad in March 1998," the lawsuit states. "The documents reveal that the purpose of the meeting was to establish a relationship between Baghdad and Al Qaeda based on their mutual hatred of American and Saudi Arabia."

Bush administration officials declined comment on the O'Neill suit. A recently retired intelligence officer who was friends with O'Neill says he fears the family's suit contains rumors and hearsay that have not been corroborated by intelligence.

"John O'Neill was a true American patriot. But given what we know about the alleged Iraq-Al Qaeda connection, my concern is that his family is now being taken advantage of," former National Security Council official Roger Cressey (search) said.

But one of the family's attorney said all the allegations will be proven in court. "We can substantiate through witnesses and documents all the allegations," said attorney Joshua Ambush, who has helped other families in successful lawsuits involving terrorism.

The lawsuit says, without citing a source, that two of bin Laden's senior military commanders, Muhammed abu-Islam and Abdullah Qassim, visited Baghdad in April and May 1998 to meet with Qusay Hussein, one of Saddam's sons.

The suit also claims that bin Laden then sent al-Zawahri, his top deputy, to meet with Iraqi officials, including then-Vice President Taha Yassin Ramadan (search). During his stay, al-Zawahri went to an Iraqi military base and a suspected nuclear and chemical weapons facility near al-Fallujah, Iraq, the suit alleges.

The suit does not identify its source of information for al-Zawahri's 1998 visit to Baghdad, but cites information from a specific captive as evidence that the same bin Laden deputy met in 1992 with Iraqi intelligence in Baghdad.

"An Iraqi serving with the Taliban who fled Afghanistan in fall of 2001 was captured in Kurdistan and has corroborated this meeting and confirmed that Iraqi contacts with Al Qaeda began in 1992," the suit states. It identifies the captive as Abu Iman al-Maliki.

O'Neill was one the FBI's top terrorism experts, leading investigations into such attacks as the 2000 USS Cole bombing. He left the FBI shortly before the Sept. 11, 2001, attacks over an investigation into his loss of a briefcase with sensitive FBI documents. He accepted a job as chief of security at the World Trade Center in New York City and was in the towers when they collapsed.

The family's lawsuit alleges documents recovered in Iraq show that three employees of the al-Jazeera (search) Arab TV network "received substantial funding from the Iraqi regime in exchange for acting as a liaison between Iraq and Al Qaeda."

"One document reveals that al-Jazeera passed letters from Usama bin Laden to Saddam Hussein," the suit states.

Al-Jazeera has denied aiding bin Laden or his network, although one of its correspondents was recently arrested in Spain on terrorism charges.