BAGHDAD, June 24 (IslamOnline.net & News Agencies) - Reports were rife in the Iraqi capital Baghdad that Israeli companies and intelligence elements were being housed in the famous Baghdad Hotel which was rented by the U.S. Central Intelligence Agency (CIA) and some American reconstruction firms.

"We were surprised that some people rented the whole hotel and were later told they were from the CIA and that the building would be devoted for them and other accompanying agents," a hotel employee told IslamOnline.net Tuesday, June 24, on condition of anonymity.

He said that hotel employees noted Monday that more foreigners and armed civilians "were seen roaming the hotel, with increasing whispers that they were here to protect Israeli companies working that rented several rooms in the hotel.

"The light guns they were carrying were not U.S.-made but rather appear to be the well-known Iraeli Ouzi machineguns," said the hotel employee to IOL correspondent outside the heavily guarded hotel.

Ousting all guests from the Baghdad Hotel, the U.S. forces even prevented the shop owners from entering the hotel and refused to pay them compensations.

"I was told to vacate my shop, which I have rented 26 years ago, in two hours’ time," complained Hamid Al-Izawi, expecting the decision to extend to other shops located in the hotel vicinity.

"They even refused to compensate us for the rent money we had paid for the whole of this year, " he lamented.

IOL correspondent tried to enter the hotel, but was banned by U.S. and Iraqi security members, who also prevented him from taking any photos.

"The hotel is now rented by U.S. reconstruction companies," they told the reporter.

The incident coincided with the circulation of an anonymous leaflet in Baghdad this week urging Iraqis to shun that hotel, because it was used by Jews and Israeli intelligence elements.

Signed by "a sincere Iraqi Muslim," the leaflet sounded the alarms that some people were buying houses from Iraqis at sky-high prices for the interest of Jews.

The warning found credit among mosque preachers and Iraqi citizens, with reports that Israelis were seeking to lay their hands on key buildings in sensitive areas of the capital.

"Jews will try to lure Iraqis into selling their homes at whatever prices, and control the media in order to spread corruption and immorality," asserted Muhanad Abdullah, Imam of Omar Ibn Al-Khatab mosque.

"But we will fight them, and will never allow a rerun of the Palestine episode," said Sheikh Muhanad, in reference to the Israeli occupation of Palestinian territories.

On Friday, a Sunni Muslim prayer leader charged that U.S. forces occupying Iraq were opening up the country to "Jews" and chided Iraqis he said were working as "brokers" for the Jewish infiltrators, Agence France-Presse (AFP) reported.

"The Jews, civilian and military people, are now entering Iraq ... buying property, factories and companies while Iraqis work for them as brokers and guides," Sheikh Mahmud Khalaf told the faithful during weekly Muslim prayers in Baghdad's Sheikh Abdul Kader al-Kilani mosque.

"It is a sin for Iraq's people to sell their lands to the Jews and to deal with the Jews in this way," he said.

The warnings came few days after U.S. Deputy Treasury Secretary John Taylor invited Israeli companies to join hands in the reconstruction of Iraq.

Taylor said in an interview with the Israeli daily Yediot Ahoront Saturday, June 21, that the Iraqi market would be always open to Israeli products.

Grapping with news of Jewish infiltration of the U.S.-occupied country, Iraqi press joined in with a flurry of reports about acquisitions of Iraqi estate by Jewish interests.

"A hotel in the city center hosts a group of Zionists seeking to buy homes and palaces that belonged to officials of the former regime," the daily al-Dawa wrote last week under the headline, "The secrets of a Karrada hotel."

"Jews are coming and buying as they did in Palestine," echoed Al-Hilal, while another newspaper, citing Baghdad residents who were offered big money to sell their homes, wondered if "Jews were about to reclaim property confiscated (when they left) in 1951."

Israeli public television reported on Saturday that a representative of the Jewish Agency had visited Iraq to check on the safety of Jews since Saddam's ouster.

Some 100,000 Jews were living in Iraq before the creation of Israel in 1948, but most left to the Jewish state and only around 40 Jews remain in Iraq now.