Pentagon spokesman Larry DiRita in a statement said the article by Pulitzer prize winning writer Seymour Hersh as "so riddled with errors of fundamental fact that the credibility of his entire piece is destroyed."

Hersh wrote in the edition of The New Yorker that hit newsstands Monday that US intelligence and military sources told him the George W. Bush administration has been conducting secret spying missions inside Iran at least since mid-2004, gathering intelligence on declared and suspected nuclear, chemical and missile sites, the magazine said.

"The goal is to identify and isolate three dozen, and perhaps more, such targets that could be destroyed by precision strikes and short-term commando raids," wrote Hersh, who last year exposed the prisoner abuse at Abu Ghraib prison in Iraq and gained journalistic fame for his reporting on the My Lai massacre in Vietnam.

"This is a war against terrorism, and Iraq is just one campaign," a former high-level government intelligence official told the magazine.

DiRita however said Monday's news report had no basis in fact.

"Mr Hersh's sources feed him with rumor, innuendo, and assertions about meetings that never happened, programs that do not exist, and statements by officials that were never made," he said.

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