U.S.-led forces discovered a cache of Iranian money and bomb-making equipment during a raid Wednesday morning in the Shiite neighborhood of Sadr City in Baghdad, the military said. Two suspected militants were killed in the raid and 19 others detained, the military said.

The United States has accused Iran of providing weapons and training to Shiite militant groups in Iraq, accusations Iran has repeatedly denied. The military says Iran has also given insurgents powerful bombs they use to penetrate the U.S. military's armored vehicles.

U.S. and Iranian diplomats are to hold talks next week about how to stabilize Iraq.

The raid Wednesday targeted 11 buildings in Sadr City, a Shiite slum that is a stronghold of the Mahdi Army militia of anti-American cleric Muqtada al-Sadr. As the U.S. forces moved into the neighborhood, four militants fired at them, sparking a gunfight that left two of the attackers dead, the military said in a statement.

During the search, the troops found a large amount of Iranian money, more than $6,000 in U.S. currency and materials for making improvised explosive devices, the military said. The target of the raid was a person suspected of smuggling weapons from Iran to insurgent groups in Iraq, the military said.