LONDON,(Reuters) – British Prime Minister Tony Blair said on Thursday that evidence pointed to Iran or its Lebanese Hezbollah allies as the source of sophisticated explosives used in roadside bombs in Iraq, although Britain did not have proof.

The accusations, first made by a senior British official in an anonymous briefing on Wednesday, have added to tensions between Britain and Iran at a time when London and Washington are seeking U.N. action over Tehran”s nuclear programme.

The British official said London believed that Iran and Hezbollah had provided deadly armour-piercing explosives and infra-red devices used to kill British troops in Iraq.

Tehran denies it helps militants in Iraq.

&#34Mr. Blair wants to cover up British forces” inability to establish peace and security in Iraq and therefore points his finger at other countries,&#34 Iranian Foreign Ministry spokesman Hamid Reza Asefi said in a statement, state television reported.

&#34The main reason for unrest and insecurity in Iraq is the presence of occupying forces, including British forces,&#34 he said, adding that it was in Iran”s interests to have a stable neighbour.

Hezbollah also rejected any link to the bombs. &#34The British accusations that the party is the source of the explosives that have targeted the British occupation are lies,&#34 the group said in a statement issued in Beirut.

Blair said the accusations were not proven but worrying. He also said the bombs may have been an attempt by Iran to intimidate Britain over its tough stance in nuclear talks.

&#34What is clear is that there have been new explosive devices used not just against British forces but elsewhere in Iraq. The particular nature of those devices leads us either to Iranian elements or to Hizbollah,&#34 Blair told a news conference after meeting Iraq”s President Jalal Talabani.

&#34However we cannot be certain of this at the present time.&#34

Talabani, who is a Kurd, said the Iraqi government would investigate the charges.

However, Iraqi Prime Minister Ibrahim Jaafari, a Shi”ite Muslim, denied that Shi”ite Iran was interfering in Iraq.

&#34Such accusations are baseless and we do not agree with them at all,&#34 Jaafari told Iranian state television. &#34Relations between Iran and Iraq are currently very friendly and strong and expanding. We are proud of the situation.

&#34Some people want to harm our existing friendly relations with Iran. But we will not let them do so,&#34 he said.

Eight British soldiers have been killed by roadside bombs since May. Both British and U.S. commanders say recent attacks in Iraq have used &#34shaped charges&#34 with greater killing power and that this may have required outside expertise.

The Iranian- and Syrian-backed Shi”ite group Hezbollah has used similar devices against Israeli troops in Lebanon, the British official said, prompting suspicion of an Iranian link.

Britain and the United States have accused Iran of meddling in Iraq for many months, but the accusations of helping provide deadly explosives are more specific than in the past.

They come at a time when Tehran is quarrelling with the West over a nuclear programme it says is peaceful but which Western countries say is aimed at developing atomic weapons.

Britain, along with Germany and France, led failed talks to restrict Iran”s nuclear ambitions and now supports the United States in referring Iran to the U.N. Security Council for possible sanctions next month.

&#34If it is also the case that they are trying to make some point about the negotiations over the nuclear weapons issue in respect of Iran … we are not going to be intimidated on that,&#34 Blair said.