Inside Iran Part VII: The Ties That Bind Iran, Iraq

TEHRAN, Iran – FOX News' Amy Kellogg recently visited Iran, where she interviewed journalists, students and others on life inside the Islamic Republic. This is the seventh in a series of eight installments about that trip, which will be aired every night on FOX News Channel.

Iran has been accused by Britain and America of helping fuel the Iraq insurgency to keep secular democracy from taking hold on Iran's doorstep.

"We also have evidence that Iranians are involved in Iraq in a very unhelpful way in supporting terrorists groups in southern Iraq," said Nicholas Burns, undersecretary for political affairs at the State Department.

Click in the video box to the right for a report by FOX News' Amy Kellogg.

Most recently, British officials said explosives that killed some of their soldiers in southern Iraq came from Iran. Iranian officials don't simply deny any involvement but still criticize Britain for the accusations.

"Maybe British officials are saying this to divert from their own problems in Iraq," said Ali Askar Khaji, Iran's special representative to Iraq.

Foreign ministry officials also say they think the accusations have to do with Western disapproval of Iran over its nuclear capability.

Iran and Iraq have a bitter history, as evidenced at the Martyrs Cemetery in Tehran. As many as 300,000 Iranians died in the Iran-Iraq war from 1980 to 1988; hundreds of thousands of Iraqis died, too. But the countries have strong ties; both are majority Shiite countries in a region that is predominantly Sunni.

All this sets the scene for either confrontation or cooperation.

In Qom, the center of Shiite scholarship in Iran, people say though the system of government that is emerging in neighboring Iraq is different than the one in Iran, they want things to work out for the Iraqis and they see no reason why Iran should want any instability on it's boarder.

Iran has even sent financial and technical aid to Iraq. Still, Grand Ayatollah Yousef Sanei, one of the top figures in Shiite Islam, admits that if Iraq's secular system works out, it could threaten Iran's theocracy.

"It's natural that if it happens there, it won't be to our benefit," Sanei said. "We have to do what we can with our religion and politics to make our people happy and they have to do with their religion and politics what makes their people happy."

In the meantime, the two countries are putting on a brave public face, with many recent meetings and photo opportunities of leaders from the two nations. The United States and Britain, however, remain unconvinced that these pictures tell the whole story.

Watch Part VIII of the series, which focuses on the Iranian victims of the Iran-Iraq war, Monday at 6 p.m. on FOX News Channel's "Special Report" with Brit Hume.