Sen. John McCain wants the Senate Armed Services Committee to hold hearings on allegations that the Defense Department may be bending U.S. laws in order to give Secretary Donald Rumsfeld more authority over clandestine overseas operations.

The Washington Post, which reported the story on Sunday based on military and civilian sources, said the Pentagon has created a new unit, called the Strategic Support Branch (search), as a stepsister to an established unit in the CIA.

The Strategic Support Branch is meant to address what Rumsfeld called the Pentagon's "near total dependence on the CIA" for human intelligence, something Rumsfeld ordered ended.

The New York Times reported the same story Monday.

But Pentagon spokesman Lawrence DiRita denied that the Pentagon has a clandestine unit reporting directly to Rumsfeld. for clandestine operations.

"The Department is not attempting to 'bend' statutes to fit desired activities, as is suggested in [the Post] article," DiRita said in a statement.

He added, however, that "it is accurate and should not be surprising that the Department of Defense is attempting to improve its long-standing human intelligence capability. ... A principal conclusion of the 9/11 commission report is that the U.S. human intelligence capability must be improved across the board."

White House spokesman Scott McClellan referred reporters seeking comment Monday to DiRita's statement, noting that inaccuracies in the story were articulated by the Pentagon.

No unit is directly reportable to the secretary, McClellan stressed, but a number of reports talk about the importance and need to expand and enhance human intelligence and that steps have been taken to do just that.

A 'Continuing Frustration'

Intelligence officials on Monday said the stories are an inaccurate portrayal of the sort of tactical activities the department has been engaged in; some even said that none of the information is particularly new and none of it represents the sort of encroachment into the CIA's territory that the articles describe.

CIA officials, in particular, state strongly that nothing the Defense Department has been up to has affected its business of collecting intelligence in world trouble spots, even in Afghanistan and Iraq.

McCain, R-Ariz., said he didn't think Rumsfeld or the department broke or bent any laws, but would like the committee to look into the spy activities and the authority given to Rumsfeld.

"The continuing frustration — not just in the Pentagon, but throughout government, is that we don't have human intelligence," McCain said on CBS' "Face the Nation" on Sunday.

"How is that a kid from Menlo Park can join the Taliban and be captured in Afghanistan and we can't get somebody infiltrated in there?" asked McCain, referring to John Walker Lindh (search), who was caught fighting with Taliban forces in Afghanistan. "I think it's a product of the frustration with the CIA of a failure to have decent human intelligence."

FOX News military analyst Maj. Gen. Bob Scales stressed that the expansion of powers be done legally.

"We have to keep this within the law, we have to keep this within the purview of the secretary of defense," Scales said, "but Congress is going to take a look at it and provide some insight."

It's no secret that America's human intelligence capabilities abroad are far from sufficient. The Sept. 11 commission (search) concluded in its report last year that human intelligence must be boosted in order to effectively defeat terrorists before they reach America's shores.

For decades, human intelligence "hasn't worked very well at all," said Scales, who added that this intelligence in Iraq is especially lacking, according to military leaders on the ground there.

"There is a huge, huge gap in Iraq today between what the military needs to know to be effective and the information that is provided to them from the CIA," Scales added.

Rep. Jane Harman (search), the ranking Democrat on the House Select Intelligence Committee, said if the reports are true, the Pentagon may indeed be circumventing Congress' oversight role over such activities, as outlined in the recently enacted intelligence reform bill.

"The story disturbs me," the California lawmaker told FOX News on Monday. "What disturbs me is not that we're trying to get better battlefield intelligence ... [but] if this is an end run around Congress and an end run around this new intelligence reform bill, I don't like it one bit."

To duplicate CIA capability at the Pentagon in an effort "that Congress doesn't know about is not right," she added.

Rep. Loretta Sanchez, D-Calif., told FOX News that she hoped House Armed Services Committee Chairman Duncan Hunter, R-Calif., would also hold hearings.

"I think it's not only important to know who's leaking information out of the Pentagon, but if these special intelligence forces are, in fact, according to law," she commented.

Rep. Clay Shaw, R-Fla., said the fact that people inside the Pentagon were talking to the press about such under-the-radar operations — despite how many inaccuracies there may be in the stories — could harm the top brass's objectives.

"I think the big issue is ... Are there leaks in the Pentagon that are in any way jeopardizing our intelligence gathering?" he asked.

Closing the Intel Gap

The Washington Post reported that the "new espionage arm" deploys teams of case officers, linguists, interrogators and technical specialists, along with newly-empowered special operations forces.

Those interviewed for the story said the unit has been in operation for two years in Iraq, Afghanistan and other places not named.

The focus of the intelligence initiative, however, is on "emerging target countries such as Somalia, Yemen, Indonesia, [the] Philippines and Georgia," the Post wrote, citing a planning memo to Rumsfeld from Gen. Richard Myers, chairman of the Joint Chiefs of Staff.

The teams reportedly conduct missions in both friendly and unfriendly countries, the Post reported, when conventional war is either far off or unlikely altogether. The CIA's Directorate of Operations traditionally has performed this role.

Senior Rumsfeld advisers told the Post that the missions are central to what they say is the Pentagon's overriding goal of combating terrorist threats.

The big question is whether or not such a unit is legal.

"It's a matter for the lawyers," Barton Gellman, the author of the Post article, told FOX News. He said Rumsfeld's predecessors didn't think they had the authority to do what he's reportedly doing.

"He asked for a reinterpretation, or a relook at it, from his general counsel, and his counsel said 'Well, you have more authority than your predecessors thought,'" Gellman said.

"The need for much more, better human intelligence is very widely agreed," Gellman continued. But he noted that the Sept. 11 commission said there needed to be more subordination of such activities to a central director of intelligence, something the Pentagon would appear to be resisting with an independent clandestine unit that doesn't coordinate with other agencies.

To some extent, officials told FOX News, the frustration described in the newspaper stories is true. Senior officials at the Pentagon are concerned about collecting the sort of human, on-the-ground intelligence that U.S. forces need to conduct their missions successfully.

One senior defense official explained to FOX News that the frustration reached its zenith much earlier on in the War on Terror, however. Following the Sept. 11, 2001 attacks it became apparent that assets were needed on the ground in areas that had been neglected and/or ignored by the intelligence community as a whole following the collapse of the Soviet Union.

The official described the situation prior to the massive U.S. assault on Taliban and Al Qaeda forces in October of 2001, saying military operations in Afghanistan might have been launched much faster if "funding and human intelligence" had not "atrophied" when the Soviets withdrew from Afghanistan, and the former Soviet republics just north of Afghanistan established their own governments.

With the threat posed by Al Qaeda and their Taliban hosts, it became clear to the defense and intelligence establishments that translators, analysts, and cash would have to be deployed quickly. The Defense Department then sent translators and others with Special Forces units that were sent to Afghanistan as the war commenced.

Scales said the military has been conducting clandestine operations much like that described in recent news reports for "many, many years" under different names and auspices.

"This isn't anything new," he said. "What is new is this huge gap that's opened up between what we need to know and what we do know, and the Department of Defense is doing whatever it can to close that gap."

FOX News' Bret Baier, Ian McCaleb, Nick Simeone and Kelly Wright contributed to this report.