Al-Masri is believed to have formed al-Qaeda's first cell in Baghdad

Abu Ayyub al-Masri, believed to be an Egyptian, has led the group since June 2006 when Abu Musab al-Zarqawi was killed in a US air strike.

Al-Qaeda in Iraq is blamed for or has claimed some of the bloodiest insurgent attacks in Iraq since 2003.

According to Iraqi officials, al-Masri was killed in an "internal battle" between militants.

The clash took place o­n Tuesday in northern Baghdad, an interior ministry official said o­n Iraqi television. The official said that he was "100% sure" that al-Masri had been killed.

However the official said that the authorities do not actually have al-Masri's corpse in their possession, and the US military has been unable to verify the claim.

Al-Masri, who is also known as Abu Hamza al-Muhajir, is believed to have trained in Afghanistan and formed al-Qaeda's first cell in Baghdad.

The United States has a $5 million bounty his head.