The U.S. military says it has arrested an Iranian officer accused of smuggling powerful roadside bombs into Iraq for Tehran's elite Quds force. The military says the Iranian man was seized from a hotel in the Kurdish city of Sulaimaniyah. In Baghdad, Correspondent Jim Randle has this report.

The U.S. military says the Iranian officer was involved in bringing explosives into Iraq that were specially-designed to wreck American vehicles and kill U.S. soldiers.

"This individual has been involved in transporting improvised explosive devices and explosively-formed penetrators into Iraq," said Army Specialist Megan Burmeister.  "Intelligence reports also indicate he was involved in the infiltration and training of foreign terrorists in Iraq."

News reports say three Iranians were initially arrested, but two were later released.

In Washington, Pentagon spokesman Bryan Whitman said the man arrested Thursday is the seventh Iranian Quds Force operative that U.S. forces have detained in Iraq. He said Tehran is ignoring repeated U.S. requests to stop such activities.

"I think it's a further reflection that they've not ceased these activities that we find troublesome and are inconsistent with being a good neighbor to Iraq," he said.

Iran has denied U.S. allegations that the Quds Force, of Iran's Revolutionary Guard, is helping arm Shi'ite militias in Iraq.

The detention of Iranians is a sensitive issue after last month's arrest of eight Iranian nationals in a central Baghdad hotel and a January arrest of five Iranians during a U.S. raid in the northern city of Irbil.

Iraq's government is backed by the United States but has good relations with its neighbor Iran.  Iraq has been trying to get Iran and the U.S. to cooperate in reducing violence in the country.

Earlier Thursday, the number two commander of U.S. forces in Iraq said violence in the country has fallen sharply and is still declining.

Lieutenant General Raymond Odierno said a seven-month-long surge of U.S. troops and a new strategy have cut attacks and deaths in Iraq.

"Attacks nationwide have fallen to the lowest level since before the golden mosque bombing in February of 2006. Car bomb and suicide attacks have dropped to the lowest level in a year, but until we can stop all of them we will not be satisfied," he added.

The bombing of the major Shi'ite shrine in Samarra sparked a wave of sectarian killings in many parts of the country.

Odierno said the decline in violence across Iraq is also seen in Baghdad. He said al-Qaida in Iraq is being pushed out of Baghdad and nearby areas, and some militants are even fleeing Iraq.

U.S. troops have been moving out of large bases into smaller combat outposts in Baghdad and in other areas.

The U.S. military says closer contact with Iraqis has yielded more tips and better information, boosting the number of weapons discovered and cutting the number of roadside bomb attacks on U.S. troops.

The latest assessment comes amid heightened tensions between the United States and Iraq's government, after 11 Iraqi civilians were killed when guards from the U.S. private security firm, Blackwater, opened fire in a busy Baghdad square on Sunday.

Blackwater says its guards acted in self-defense, but Iraqi eyewitness have disputed this.

U.S. and Iraqi authorities say they have set up a joint commission to investigate the deadly shoot-out.