Former Iraqi President Saddam Hussein periodically removed guards on the Syrian border and replaced them with his own intelligence agents who supervised the movement of banned materials between the two countries, US investigators have said.

The discovery by the Bush administration's Iraq Survey Group (ISG) is fuelling speculation, but is not proof, that the Iraqi ruler moved weapons of mass destruction into Syria before the March, 2003 invasion by the US-led coalition, defence sources said.

The ISG interviewed Iraqis who told of Saddam's system of dispatching his trusted Iraqi intelligence service to the border where they would send border inspectors away, the sources were quoted as saying by The Washington Times.

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The shift was followed by the movement of trucks in and out of Syria supected of carrying materials banned by US sanctions. Once the shipments were made, the agents would leave and the regular border guards would resume duties.

"Saddam's family was controlling the black market and it was a good oppurtunity for them to make money," a Pentagon official told the daily.

According to the sources, Saddam and his family grew rich from this black market and personally dispatched his intelligence service to the border to make sure the shipments go through.

The ISG is a 1,400 member team organised by the Pentagon and CIA to hunt for Saddam's suspected stockpiles of WMD, such as chemical and biological agents. So far, the search has failed to find such stockpiles.