Updated

U.S. intelligence agencies have stepped up monitoring of an Islamic extremist group operating in northern Iraq that may have ties both to the Al Qaeda terrorist network and to Iraqi President Saddam Hussein, officials said Tuesday.

The group, called Ansar al-Islam, is an offshoot of the Islamic Movement of Kurdistan, a broad political party that controls a portion of northern Iraq. It is based at Halabja, site of a 1988 chemical attack by the Iraqi army that killed thousands, and controls a handful of villages near the Iranian border.

Asked about the situation at a Pentagon news conference, Defense Secretary Donald H. Rumsfeld refused to comment beyond saying, "I have said for some time that there are Al Qaeda in Iraq, and there are."

"They have left Afghanistan," he said, referring to Al Qaeda. "They have left other locations. And they've landed in a variety of countries, one of which is Iraq."

U.S. intelligence recently monitored an Ansar al-Islam site in northern Iraq where chemical or biological weapons experiments were conducted with farm animals. It initially was feared this might constitute a significant chemical-biological threat, but U.S. officials decided it was not serious enough to justify a military strike, American officials said Tuesday.

The officials, who spoke on condition of anonymity, initially said Arab members of Ansar al-Islam were involved in the experimentation, but later they said it was unclear whether they were Arabs or Kurds. The group reportedly has several hundred members, mostly Kurds.

Ansar al-Islam remains a serious concern, the officials said, in part because of indications the group is connected to the Al Qaeda terrorist network.

Iraqi Deputy Prime Minister Tareq Aziz told CBS News that Al Qaeda elements are operating in regions controlled by Kurds. There are no Al Qaeda in parts of Iraq controlled by Saddam, and Iraq does not possess nuclear, chemical or biological weapons, Aziz said.

In an effort to topple Saddam, the United States has courted dissidents from Kurd-controlled Iraq. Aziz questioned why American officials have not publicly raised the Al Qaeda matter with those leaders.

Rumsfeld would not comment on Ansar al-Islam's activities. He was asked whether its members are protected by Saddam.

"In a vicious, repressive dictatorship that exercises near total control over its population, it's very hard to imagine that the government is not aware of what's taking place in the country," he replied.

Some believe Saddam's government has secretly supported Ansar al-Islam in a bid to destabilize the Kurdish area and weaken his major Kurdish opponents.

Much of northern Iraq is beyond the control of Saddam because U.S.-British overflights prevent the Iraqi air force from attacking the area's Kurdish population. The Kurds generally are strongly opposed to Saddam.

A U.S. official said that about a dozen Ansar al-Islam members trained in camps in Afghanistan in 1999 and 2000 and had contact with members of Usama bin Laden's Al Qaeda organization. As Arab members of Al Qaeda have been fleeing overland from Afghanistan through Iraq, some have been given shelter by Ansar al-Islam members.

In a related development Tuesday, U.S. fighter jets bombed an air defense facility in southern Iraq near the city of al-Amarah, about 120 miles southeast of Baghdad, U.S. officials said. They said it was in response to "Iraqi hostile threats and acts" against U.S. and British pilots who enforce a "no fly" zone over southern Iraq. No other details of the threats or the attack were disclosed.

Aziz told CBS that Iraq does not trust United Nations weapons inspectors and accused them of helping gather intelligence for American air raids in 1998.

"Why doesn't Congress send a fact-finding mission equipped with American experts?" he said. "We will give them unfettered access to each and every place they claim that there are weapons of mass destruction."

He also taunted President Bush for what he said was a failure to rally allied support for a possible invasion of Iraq.

"None of America's allies who participated against Iraq in the war of 1990-1991 is supporting America's pretext," he said. "Who is supporting the United States in this invasion?"

Of Iraqis' preparation for war, he said: "We are defending our integrity, we are defending our national interests and any aggressor cannot win a war against us."