"There are a huge number of trucks waiting to cross the border into Kurdistan but the Iranians are not allowing them through," said the mayor of Joman town near the Haj Umran border post in northern Iraq.

"The trucks are carrying frozen goods such as chicken, meat, and eggs, which are going to spoil. We spoke to the Iranian officials but they refused to allow the border post to open," Abdel Wahid Koani said.

Tehran said Monday that it was closing its frontier with Iraq's autonomous Kurdish region in protest against the detention last week of an Iranian by US troops.

Angry Kurdish merchants in the northern city of Arbil said that they were being forced to search for other sources of foodstuffs and electronic goods, the main items imported from Iran.

"This closure will raise the prices in our markets and will cause big problems to our business all over the province, especially for those dealing in foodstuffs and household equipment," said merchant Najat Ahmed.

Another trader, Dulair Hajji Mohammed, said that dealers would start looking to Turkey and Syria if the closure continued indefinitely.

"The overwhelming majority of goods in Kurdistan markets are Iranian-made," said Mohammed. "But if the borders continued to be closed, we will be forced to look for Syrian and Turkish goods despite their higher cost."

Economic analyst Mohammed Salman of the University of Arbil warned that people on both sides of the frontier would be affected. "The closure of the border will hit both the Iranians and Iraqis because Kurdistan is considered a fertile market for Iranian goods," said Salman.

Aziz Ibrahim, director-general of the Kurdish ministry of trade, agreed that there could be significant economic damage. "There are 120 Iranian firms working in different regions of Kurdistan, most of which are participating in construction projects and have signed trade contracts with Iraqi concerns," Ibrahim said.

"Kurdistan is a key trading partner with Iran and a major importer of Iranian goods."

Kurdistan trade minister Mohammed Raouf estimated the value of goods crossing the border annually at $1 billion.

Iran said that it had shut the border following the detention September 20 by US forces of Mahmudi Farhadi. The US military charges that Farhadi is an officer in the covert operations arm of Iran's elite Revolutionary Guards, accused by American commanders of helping Shiite militias involved in Iraq's bloody sectarian conflict.

Iran has made clear that it regards Iraqi sovereignty at stake in Farhadi's continued custody after both the regional and national authorities of Iraq said that he had been visiting with their consent.

Iraqi President Jalal Talabani, himself a Kurd, has said that the arrest of an Iranian official who had been invited by the Kurdish authorities was "a humiliation for the regional administration."

The row comes as Iran intensifies its pressure on the Iraqi authorities to close the rear bases of separatist Kurdish guerrillas active in the Islamic republic's western provinces.

On Saturday, Iran confirmed for the first time that it had shelled suspected positions inside Iraq of the PJAK (Party of Free Life of Kurdistan), a rebel group linked to Turkey's outlawed Kurdistan Workers' Party (PKK).

Iraqi interior minister Jawad Al Bolani meanwhile arrived in Ankara Tuesday to discuss a planned security cooperation agreement aimed at resolving the problem of Turkish Kurd rebels taking refuge in northern Iraq.

Ankara has threatened to attack Kurdistan Workers' Party (PKK) bases in northern Iraq if Baghdad and Washington fail to curb the rebels, who have stepped up attacks inside Turkey this year. -AFP