According to the report, the Saudis view Iraq's Shiite prime minister, Nuri al-Maliki, as an agent of Iran and appear to have stepped up efforts to weaken his government, providing funding for Sunni groups.

While refusing to discuss the Times report specifically, White House spokesperson Dana Perino insisted Friday that Washington and Riyadh are working closely on security issues.

"We have very strong relations on counter terrorism measures," Perino said.

"We have worked very closely with Saudi Arabia."

According to the Times report, which cites unnamed officials of the administration of President George W Bush, one official told the paper that there was evidence Saudi Arabia was supplying money to Maliki's opponents but declined to say if that funding was going to Sunni insurgents.

"That would get into disagreements over who is an insurgent and who is not," the official said.

The Bush administration officials also said that of an estimated 60 to 80 foreign fighters who enter Iraq every month, nearly half come from Saudi Arabia and the Saudi leadership has not done enough to counter the influx.

Secretary of State Condoleezza Rice and Defense Secretary Robert Gates planned to raise Washington's concerns in a visit next week to Saudi Arabia, the paper said.

The Bush administration has refrained from publicly criticising its long-time ally over Iraq and has instead blamed Iran and Syria for fomenting violence and sectarian divisions.

But the officials spoke to the Times with the clear intention of sending a signal to the Saudis after previous private appeals failed to produce results, the newspaper said.

US-Saudi relations have been increasingly strained since the US-led invasion of Iraq in 2003. In March, King Abdullah slammed the "illegitimate foreign occupation" of Iraq.

Tensions have also flared over the Arab-Israeli conflict, with Washington struggling to persuade Saudi Arabia to give full backing for US diplomatic efforts.

An illustration of the US-Saudi rift over Iraq came during a meeting in Riyadh in January, when Saudi officials confronted US envoy Zalmay Khalilzad with documents suggesting Iraq's prime minister could not be trusted, the paper said.

One document claimed Maliki was an Iranian agent and another purportedly showed Maliki warning radical Shiite cleric Moqtada al-Sadr to keep a low profile during a planned increase in US troops, the paper said.

Khalilzad protested to King Abdullah and US officials insisted the documents were forgeries. "Maliki wouldn't be stupid enough to put that on a piece of paper," one official told the Times.

The Saudis, however, remained skeptical, officials said.