Gunmen wearing Iraqi army uniforms seized an Iranian diplomat as he drove through central Baghdad, officials said Tuesday. One Iraqi government official said the diplomat was detained Sunday by a special Iraqi army unit that reports directly to the US military. But a military spokesman denied any US troops or Iraqis that report to them were involved. "We've checked with our units and it was not an MNF-I (Multi-National Forces - Iraq) unit that participated in that event," military spokesman Lt. Col. Christopher Garver said, adding he could not confirm the diplomat was seized. An official with the Iranian Embassy in Baghdad, said the diplomat was heading to check on the planned opening of an Iranian bank Sunday in the central Karradah neighborhood when he was seized by men wearing Iraqi army uniforms. The Iraqi government official said Iraqi soldiers in two vehicles intercepted a car carrying the diplomat at 6 p.m. Sunday in the predominantly Shi'ite area, then placed him in one of their vehicles that sped away. Iraqi police, apparently suspecting that a kidnapping was taking place, opened fire on the second vehicle and detained the occupants, according to the official. He added that the men who had been detained were released Monday into the custody of members of the unit, who showed official badges and said they need to transfer the suspects to another police station. The Iraqi troops were part of an army unit that receives direct orders from the US military, the official said, declining to be identified because of the sensitivity of the information. Two other Iraqi officials said earlier that the diplomat was kidnapped by gunmen in Karradah, which has been hit by several recently bombings, and they expected negotiations to start to secure his release. Iran condemned the abduction of its diplomat in Baghdad, adding that it holds the United States responsible for his life. Foreign Ministry spokesman Mohammad Ali Hosseini said the gunmen "operate under the supervision of the American forces in Iraq," the official Islamic Republic News Agency reported. "The Islamic Republic of Iran strongly condemns this aggressive act which is in violation of international law ," IRNA quoted Hosseini as saying. "Iran holds American forces in Iraq responsible for the safety and life of the Iranian diplomat," Hosseini added. The incident comes as tensions have been rising between Iran and the United States. The Shi'ite-led Iraqi government has shown increasing impatience with both sides for letting the tensions spill over the border after the US detained five Iranians in northern Iraq and accused them of having links to an Iranian military faction blamed for funding and arming Iraqi militants. Two diplomats also were detained in a December 21 roundup of a group of 10 suspects. The diplomats were interrogated and released to Iranian officials eight days later. The White House also has authorized US troops in Iraq to kill or capture Iranian agents deemed to be a threat, saying evidence was mounting that Iran is supporting terrorists inside Iraq and is a major supplier of bombs and other weapons used to target US forces. Teheran has denied the charges. The United States and Iran have regarded each other with distrust and suspicion since the 1979 takeover of the US Embassy in Teheran by militant students. Most recently, tensions have flared over US-led efforts to isolate Iran and force it to abandon its suspected nuclear weapons program.