An Iraqi court on Monday ruled that a Hezbollah commander accused of plotting the killing of five US soldiers in January 2007 should be released from custody over a lack of evidence, his lawyer said.

Ali Musa Daqduq, an alleged fighter in Lebanon's Hezbollah movement, was handed over to Iraqi authorities in December as US forces completed their withdrawal from the country nearly nine years after the invasion of Iraq.

"The Central Criminal Court of Iraq issued a ruling to release Ali Daqduq today, Monday, because of a lack of evidence," his lawyer Abdulmahdi al-Mutairi told AFP.

"No document was provided that indicates the guilt of Daqduq, and all of what was shown to the court were copies and not originals. There was no testimony and the charges had no foundation."

It was unclear when precisely Daqduq would be freed.

The US embassy in Baghdad did not immediately comment on the ruling.

Daqduq was captured by US-led forces and held by American troops until he was handed over to Iraqi officials in December, though the latter period of his detention in US custody was under Iraqi government authority as part of an agreement between Baghdad and Washington.

Some members of the US Republican Party had called for leaving US forces to simply bring Daqduq, a Lebanese national, with them as they left Iraq.

But officials said that would be illegal, under security agreements between the two governments, and would have fractured the new and "enduring" relationship with Iraq that President Barack Obama has sought to build.

At the time of Daqduq's capture, the United States accused Iranian special forces of using the Shiite militant group Hezbollah to train Iraqi extremists and of planning the 2007 attack.

The US military said the Quds Force, a unit of the Iranian Revolutionary Guards, and Hezbollah were jointly operating camps near Tehran in which they trained Iraqi fighters before sending them back to carry out attacks in Iraq.

It said Daqduq, captured in Iraq's southern city of Basra in March 2007, had confessed to training Iraqi extremists in Iran.

Iran dismissed the US accusations as "ridiculous."