THIS IS A MAJOR DEVELOPMENT:

American and Iraqi joint patrols, along with U.S. Special Operations (search) teams, captured two men with explosives in Baghdad on Monday who identified themselves as Iranian intelligence officers, FOX News has confirmed.

Senior officials said it was previously believed that Iran had officers inside Iraq stirring up violence, but this is the first time that self-proclaimed Iranian intelligence agents have been captured within the country.

The Defense officials also confirmed to FOX News that in recent days there has been significant success in tracking down “known bad guys” based on information from local citizens.

Iran caught in an act of war against Iraq? Hmm. What could that lead to? As Ed Morrissey points out:

Combined with their instransigence on their nuclear programs and their capture of British sailors just days ago, the Iranians have exhausted the patience of everyone involved. These explosives would have been used against American personnel in Iraq — in fact, some or most of the attacks on Americans in Baghdad may have already been generated from Iranian intelligence.

One suspects that Bush will be happy for the leverage, and the cover, that this development provides, if this story pans out. I think it’s also good news that Iraqis are cooperating more on tracking down bombers, something that’s likely to increase if this is seen as an Iranian assault on Iraq.