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Washington - Iran is fighting a "proxy war" through Shi'a militias against the Iraqi state and United States-led forces in the war-torn nation, US war commander General David Petraeus said on Monday.

"It is increasingly apparent to both coalition and Iraqi leaders that Iran, through the use of the Quds force, seeks to turn the Iraqi special groups into a Hezbollah-like force to serve its interests and fight a proxy war against the Iraqi state and coalition forces in Iraq," Petraeus said.

Petraeus was testifying at a crucial hearing of the House of Representatives Foreign Affairs and Armed Services committees seen as a key moment for US strategy on Iraq.

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