The leader of al Qaeda in Iraq is still being hunted, the U.S. military said on Friday, after Iraqi officials declared Abu Ayyub al-Masri had been caught in what is the latest episode of false claims about the militant.

The detention of Masri would have been another blow for al Qaeda, which has been forced to regroup in northern Iraq after a wave of U.S. military assaults in and around Baghdad.

Iraqi security sources had already begun to cast doubt on the earlier announcement that Masri, an Egyptian with a U.S. bounty of $5 million on his head, had been picked up in an operation in the northern city of Mosul on Wednesday.

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One senior Iraqi security source in Mosul said the man caught in that raid was an Iraqi.

"He has not been detained," a senior U.S. military official told Reuters, without giving further details.

It is not the first time there has been confusion over the fate of Masri. Iraq's Interior Ministry said a year ago he had been killed, but soon afterwards Sunni Islamist al Qaeda released an audio tape purportedly from him.

Al Qaeda in Iraq was headed by the Jordanian militant Abu Musab al-Zarqawi until he was killed in a U.S. air strike in June 2006. His successor, Masri, was Zarqawi's close associate.

Earlier, Interior Ministry spokesman Major-General Abdul-Karim Khalaf said a detained associate of Masri took Iraqi security forces late on Wednesday to where the al Qaeda leader was apparently hiding.

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