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DATE=3/22/2000 TYPE=CORRESPONDENT REPORT TITLE=IRAQ /IRAN ATTACKS (L-ONLY) NUMBER=2-260477 BYLINE=LISA BRYANT DATELINE=CAIRO CONTENT= VOICED AT: INTRO: Iraq has blamed Iran for a mortar attack on a residential area of Baghdad that reportedly killed four people and injured 38 Tuesday night. From Cairo, Lisa Bryant reports the incident is the latest example of rising tensions between two long-time adversaries. TEXT: Baghdad is calling the mortar attack a flagrant aggression against the country's security and sovereignty. Iraq claims unnamed agents of the Iranian government fired six mortar bombs on a residential building in the capital. A spokesman said Baghdad reserved the right to retaliate suitably against Tehran. So far, however, Iran has not commented on the matter. According to Iraq's official news agency, two of those killed in Tuesday's mortar assault were Iraqis, and the others were from other Arab countries. The attack reportedly created panic among a large crowd of holiday goers nearby who were celebrating the Muslim Eid al-Adha feast and the Kurdish New Year. An Iraqi spokesman said those injured -- including children, women and elderly people -- were taken to a nearby hospital. The spokesman also said an Iranian mortar and two unexploded bombs had been found near the bombed building. The Agence France-Presse news agency reported the Palestinian representative to Baghdad identified two of the dead as Palestinians. The Palestinian official, Azzam al-Ahmad, said the mortar attack had been deliberately planned to hurt Palestinian-Iraqi relations. Iraq and Iran still maintain hostile relations after fighting a brutal eight-year war in the 1980s. Each harbors dissident groups from the other country. Both have recently stepped up charges against each other of cross-border attacks. Earlier this week, for example, Iranian security agents accused Baghdad of helping two Iranian opposition fighters cross the border to launch a mortar attack on Tehran. Last week, the Iranian opposition, Mujahideen Khalq, said Iran had attacked one of its military bases inside Iraq. On Monday, the leading Iraqi newspaper, "Babel," warned Tehran against further attacks, and accused U-S Secretary of State Madeleine Albright of encouraging what the newspaper called Iranian aggression. In a speech last week, Secretary Albright expressed regret about America's support of Iraq during the Iraq-Iran war, and announced steps to ease U-S sanctions on Tehran. (SIGNED) NEB/LB/GE/JP 22-Mar-2000 11:12 AM EDT (22-Mar-2000 1612 UTC) NNNN Source: Voice of America .