The U.S. military said on Sunday that its troops detained two suspected weapons smugglers linked to the special Iranian military unit of Quds Force, near the Iranian border.
The two were seized with a number of weapons during a pre-dawn raid on a rural area in eastern Iraq, the military said in a statement.
"The suspects may be associated with a network of terrorists that have been smuggling explosively formed projectiles (EFPs), other weapons, personnel and money from Iran into Iraq," the statement said.
EFP is a shaped charge explosive designed to penetrate armor effectively. They were first developed during World War II.
Previously, U.S. officials accused Iran of providing and training militia in Iraq with these deadly bombs, but Iran denied the accusations.
The Quds Force was created during the Iran-Iraq war in 1980s as a special unit from the broader Pasdaran forces.