Nine Iranians being held in Iraq would be released soon, the US military said this afternoon, just days after US officials signalled a possible change in approach by noting positive Iranian developments in Iraq.
The US military also announced the deaths of seven soldiers killed on Monday, making 2007 the deadliest year for its troops in Iraq.
US military spokesman Rear Admiral Greg Smith said the Iranians to be released included two who were among five detained by US forces in northern Iraq in January on suspicion of providing support to Shia militias. The others were detained over the past several years.
Iraqi Foreign Minister Hoshiyar Zebari hailed the announcement, saying it was a confidence-building measure that would encourage more productive talks between Iran, Iraq and the United States on improving security in Iraq.
"We have tried very hard with the American military and the embassy to release them. We are very pleased now that a decision has been made," Mr Zebari told Reuters by telephone.
The detention of the five Iranians in Arbil in January contributed to a significant rise in tensions between Iran and Iraq, as well as between Tehran and Washington.
"It is our intent to release nine Iranians currently in custody in the near future. They will be released in the coming days," Smith told a news conference. "Two of them were detained in Arbil in January of this year."
US forces have said the five detained in Arbil were held on suspicion of being members of the Iranian Revolutionary Guards' elite Qods force. Iran insists they are diplomats and has demanded their release.
"These individuals have been assessed to be of no continuing value, nor do they pose a further threat to Iraqi security," Smith said.
Smith's surprise announcement came as Iran opened two consulates in Arbil and Sulaimaniya in northern Iraq.
Speaking at a ceremony to mark the Arbil consulate's opening before Smith's announcement, Ambassador Hassan Kazemi-Qomi repeated Iran's call for the release of all five held in Arbil.