"We gather his family has confirmed that he's dead," a Foreign Office spokesman added. "Our thoughts go to his family."

"Abdul Majid al-Khoei was well-known to us in the UK as a highly respectful leader of the Shiite community and a member of the UK Muslim community," he said.

He added that Foreign Office Minister Mike O'Brien had spoken to his nephew Youssef al-Khoei earlier Thursday.

"Persons who were with him... said he was martyred by treacherous hands," his nephew Jawad al-Khoei was quoted as saying on the BBC teletext service, which said the killing took place at a mosque in Najaf.

An Iraqi opposition source told AFP that another cleric, with the given name of Sheikh Bilal, was wounded, as was an Iraqi journalist, Maad Fayyad, working for the London-based newspaper Asharq al-Awsat.

An editor at Asharq al-Awsat confirmed that Fayyad had been injured, but that his wounds were not life threatening.

He said he was told by Fayyad that a large number of people had been involved in the attack.

Majid was the son of the late Ayatollah al-Khoei, one of the main leaders of Iraq's Shiite community during the 1991 Gulf War, who died in 1992 under house arrest.

There had been speculation that al-Khoei, who repeatedly called for Shiite cooperation with the United States, had gone back to Najaf with help from US forces, and that his return signalled a US attempt to promote a "pro-American" current as Saddam Hussein's regime collapsed.

A spokesman for al-Khoei's foundation in London had earlier told AFP in Dubai that the cleric had been attacked with knives while he was visiting Imam Ali's tomb in Najaf.

SPACE.WIRE