Three Mossad agents have been killed in the oil rich city of Kirkuk amid reports that the Israeli spy agency is active in northern Iraq.

The Arab-language Israeli daily al-Arab reported that the three agents were killed on Wednesday in a blast at a building which was guarded by the US security firm Blackwater. According to report, the three agents carried fake Iraqi passports.

Meanwhile, the Iraqi media reported that hundreds of Mossad agents had been deployed to northern Iraq. According to reports, the agents were tasked with the killing of the Iraqi scientists who were involved in the country's nuclear program under Saddam.

US investigative journalist Seymour Hersh had earlier reported that Israeli agents were based in Iraq's Kurdistan to gather intelligence on Iran's nuclear activities. According to Hersh, the agents who were disguised as businessmen had managed to infiltrate into Iran and Syria and install smart espionage gadgets inside the countries.

Israel hoped that the US would resume the activities of the Kirkuk-Haifa pipeline which was constructed during the British rule. Under pressure by Arab countries, the US, however, had to drop the plan.