Mounting evidence gathered over several years has convinced US and foreign intelligence agencies that leading terror suspects have been living inside Iran.

IRAN is holding top members of the al-Qaida terror network, the intelligence minister said yesterday, days after US President Goerge W Bush accused the country of harbouring terrorists.

Iranian authorities have arrested "top members" of al-Qaida.

Iran was quick to deny a report today that it was holding a top al-Qaida official, but it acknowledged it had not yet identified all the members of Osama bin Laden’s terror group it has in custody.