Soon after toppling Saddam Hussein's Sunni-dominated Baath government, U.S. officials helped Iraqis rebuild an entirely new military and government. The existing National Intelligence Service is run by Gen. Mohammed Shahwani, a Sunni Muslim with ties to the U.S. military, but U.S. officials fear it could be compromised by a separate Shiite agency, USA Today correspondents in Baghdad and Washington reported.

Among Washington's concerns is their suspicion Iran is helping train and supply Shiite insurgents and could misuse a Shiite intelligence agency, with which Shahwani agrees, the report said.

"We believe that all the security forces have to be neutral," he said. "They all have to work for the government, without any religious or party influence."