"The reports about an agreement between the Pentagon and the Azeri government to base US troops in Azerbaijan are without basis in fact," Foreign Minister Vilayat Guliyev was quoted as saying by Azertaj, the state news agency.

"Azerbiajan cooperates closely with the US but that cooperation does not include stationing US troops on Azeri soil."

The report was "an invention," he said, adding: "This sort of disinformation is orchestrated by certain political forces and only serves to complicate an already difficult situation in the region."

The Russian daily Nezavisimaya Gazeta reported Thursday that the Pentagon had ready a plan for military action against Iran, including a deal to station troops in Azerbaijan and neighbouring Georgia.

"The military action is designed to complete a popular uprising on which the Pentagon is counting," said the paper, adding that the operation's launch date would be decided at a meeting to be held this week in the White House.

The newspaper report speculated that the main thrust of any US military action against Iran would be launched from Iraq, but that the former Soviet republics of Azerbiajan and Georgia would also be used.

Azerbaijan shares a border with Iran. Like its neighbour, Azerbaijan has a majority Shiite population but it has close ties with the West and supported the US-led actions in Afghanistan and Iraq.

Ross Wilson, the US ambassador to Azerbaijan, denied the report Thursday, saying: "We have no such plans." Georgian officials also denied that any military action would be launched from its soil.

The Nezavisimaya Gazeta report appeared to stem from a recent toughening of Washington's stance on Iran, which it accuses of harbouring terrorists and having a secret nuclear weapons programme.

A top US defence official said Wednesday that there was "serious unhappiness" in the administration of President George W. Bush about Iran.

But asked about a possible US military intervention in Iran, White House spokesman Ari Fleischer said earlier this week that the US planned to maintain a "diplomatic approach."

WAR.WIRE