Adm. Mike Mullen told a Pentagon news conference the military has evidence - such as date stamps on newly found weapons caches - that shows that recently made Iranian weapons are flowing into Iraq at a steadily increasing rate. Some of that firepower was used to support insurgents during the recent fighting in Basra in southern Iraq.
Evidence he has seen, Mullen said, "has shown me, though, that some of the weapons are recently not just found, but recently manufactured."
Both Mullen and Defense Secretary Robert Gates have made it clear that while all military options are on the table, they prefer at this point to use other pressures on Iran.
"The solution right now still lies in using other levers of national power, including diplomatic, financial and international pressure," Mullen said.
Mullen also acknowledged that launching a third conflict in that region would be extremely stressing for U.S. forces. Yet, at the same time, he said he has reserve capabilities in the Navy and the Air Force for any needed military action.
"It would be a mistake to think that we are out of combat capability," he said.
The latest findings, said Mullen, still do not prove that the highest leadership in the Iranian government has approved the stepped up aid to insurgents who are killing U.S. and Iraqi forces.
But he said it appears that the leaders of the Quds Force, an elite unit of Iran's Revolutionary Guards, are aware of the activity. And with their strong ties to Tehran's leaders, Mullen said, it's very difficult to believe that "there isn't knowledge there as well."
Still, Mullen added: "I have no smoking gun that could prove the highest (Iranian) leadership is involved in this."
In other developments:
U.S. military leaders have escalated their rhetoric against Iran of late, noting that suggestions last year that Tehran may have been backing off its support for militants have turned out not to be valid. Instead, Mullen said there also is recent evidence that Iran is continuing to train insurgents for the fight in Iraq.
"I just don't see any evidence of them backing off. And Basra highlighted a lot of that," Mullen said of Iran.
He would not detail any potential U.S. military options, and he downplayed any impending action.
"We have to continue to increase pressure, and I have no expectations that we're going to get into a conflict with Iran in the immediate future," said Mullen. "But I am concerned over time, just in these last couple years, that tensions continue to rise. Iran does not respond and, in fact they seem to be ratcheting it up in terms of their support for terrorism."
He said Iran has made it clear it wants to be a regional power, and he believes Tehran would prefer to see a weak Iraq, where it could significantly influence what happens there.