Al-Qaeda in Iraq has denied government allegations that suspected militants in Iraqi custody were planning to attack the World Cup in South Africa.

A statement purportedly from the group was posted on the internet, describing the government's allegations as "cheap lies".

The Iraqi government announced last week it had arrested a Saudi citizen accused of planning an attack against the World Cup.

The alleged militant, Abdullah Azam Saleh al-Qahtani, said in an interview with The Associated Press that he and a friend talked about attacking Danish and Dutch teams at the World Cup next month to avenge insults against the Prophet Mohammad.

Al-Qahtani said he came to Iraq in 2004 to fight Americans and was recruited by al-Qaeda.

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