Iran and an embattled Iraqi politician on Sunday denied accusations that classified U.S. intelligence material had passed between them, though Tehran acknowledged it has a "permanent dialogue" with Ahmad Chalabi (search).
Iran's Foreign Ministry also said the country had sent a "warning" message to the United States through the Swiss Embassy concerning Washington's actions in Iraq, where U.S. troops have been fighting in holy cities. In the absence of formal diplomatic relations between the two countries, Switzerland looks after American interests in Iran (search).
On the streets, about 500 angry hard-line students, chanting "Death to America" and "Death to Britain," gathered outside the British Embassy in Tehran to condemn last week's damage to a shrine in Najaf in coalition fighting and the treatment of Iraqi prisoners at Abu Ghraib (search).
Chalabi, once thought by the Pentagon to be a possible successor to Saddam Hussein (search), has fallen out of favor with the United States, which has accused him of giving sensitive information to Iran about the U.S. occupation of Iraq.
Iran, which once had close ties with Chalabi's Iraqi National Congress, rejected the charges.
"We had continuous and permanent dialogue with Chalabi and other members of the Iraqi Governing Council," Foreign Ministry spokesman Hamid Reza Asefi said at a press conference. "But spying charges are unfounded and baseless. It's not true at all."
"We didn't receive any confidential information from Chalabi or any other member of the Iraqi Governing Council," Asefi said.
Chalabi denied spying for Iran and accused CIA director George Tenet of being behind the accusations.
"That's a false charge. We never provided any classified information from the U.S. to Iran, and neither I nor anyone in the INC," he said in a televised interview.
Meanwhile, U.S. Sens. Dianne Feinstein, D-Calif., and Chuck Hagel, R-Neb., both members of the Senate Intelligence Committee, said they would ask intelligence agencies for a report on the allegations against Chalabi
"This is a very, very serious charge," Hagel said in a televised interview. "There is no way the Senate Intelligence Committee is not going to be in this."
In an interview with ABC's "This Week," Chalabi said that although his group shared information with the United States, "They gave us no classified information at any time."
He said Congress should investigate the charges.
"I am prepared to come there and lay out all the facts and all the documents that we have, and let Congress decide whether this is true or whether they are being misled by George Tenet," he said.
In Washington, an intelligence official said the CIA would welcome Chalabi's offer to testify under oath before Congress. A CIA spokeswoman declined to comment on Chalabi's charges against Tenet.
Chalabi and his network of Iraqi exiles had provided the Bush administration with intelligence about weapons of mass destruction.
He became a liability after no such weapons were found, undercutting the United States' and Britain's primary justification for the war.
Chalabi, who has become a harsh critic of Washington's Iraq policies, has been embroiled in a public battle with the U.S.-run occupation authority since Iraqi police -- backed by American soldiers -- raided his home and offices Thursday.
Asefi said American allegations against Chalabi were an attempt to shift attention from the scandal surrounding the abuse of Iraqi prisoners and Washington's increasing problems in Iraq.
The Foreign Ministry spokesman, asked whether Iran had sent a message to the United States to protest its policy in neighboring Iraq including damage to Shiite holy shrines there, Asefi said, "The message is one of warning," but he wouldn't provide details.
Recent fighting in the Shiite holy cities of Najaf and Karbala has prompted demonstrations and warnings from clerics and the public in Shiite Muslim Iran.
In Tehran, riot police surrounded the protesting students who called on the Iranian government to close down the British Embassy and expel its ambassador. Some protesters threw stones at the building, but caused no damage. Police arrested a number of students who tried to push their way into the embassy's entrance gate.