Anne Penketh: Iraq is the prize in this battle

The Americans and British have consistently accused Iran of responsibility for the roadside bombs that have targeted coalition troops inside Iraq. The Iranian government has denied the accusations and in turn accuses America of fomenting trouble in Iran.

Beyond the mud-slinging, the two countries are clearly engaged in a proxy war, with the nuclear ambitions of a newly assertive Iran under its hardline President part of the equation.

The message from the Iranian President, Mahmoud Ahmadinejad, did not fall on deaf ears when he said his country was ready to "fill the power vacuum" in Iraq. The US ambassador to Iraq, Ryan Crocker, voiced US concerns by referring to Mr Ahmadinejad's taunt in his testimony to a Congressional panel on Monday, warning that if Iraq fell into chaos: "Iran would be a winner in this scenario, consolidating its influence over Iraqi resources and possibly territory."

Expect the next round in the proxy war at the end of the month, when world leaders head for the UN general sssembly.