Austrian sniper rifles that were exported to Iran have been discovered in the hands of Iraqi terrorists, The Daily Telegraph has learned.

More than 100 of the.50 calibre weapons, capable of penetrating body armour, have been discovered by American troops during raids.

The guns were part of a shipment of 800 rifles that the Austrian company, Steyr-Mannlicher, exported legally to Iran last year.

Within 45 days of the first HS50 Steyr Mannlicher rifles arriving in Iran, an American officer in an armoured vehicle was shot dead by an Iraqi insurgent using the weapon.

Over the last six months American forces have found small caches of the £10,000 rifles but in the last 24 hours a raid in Baghdad brought the total to more than 100, US defence sources reported.

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The rifle can pierce all body armour from up to a mile and penetrate armoured Humvee troop carriers.

It is highly accurate and fires a round called an armour piercing incendiary, a bullet that the Iranians manufacture.

While not denying that Iranian weapons may have been found in Iraq, Ahmadinejad implied that if they were, it was not his government's doing. "Can Americans close their long borders?" he asked, noting that "millions" of Iranians cross the border into neighboring Iraq each year. "The position of our government . . . and the position of the Revolutionary Guard is also the same: We are opposed to any kind of conflict in Iraq."

Marine Gen. Peter Pace, chairman of the Joint Chiefs of Staff, said yesterday that he has no information indicating Iran's government is directing the supply of lethal weapons to Shiite insurgent groups in Iraq.

"We know that the explosively formed projectiles are manufactured in Iran," Pace told Voice of America during a visit to Australia. "What I would not say is that the Iranian government, per se, knows about this."