The United States on Monday slapped sanctions on a Hezbollah chief blamed for attacks against US forces in Iraq, after Baghdad authorities freed him from custody last week.

The Treasury Department named Ali Musa Daqduq, a senior commander in Hezbollah, which the US considers a terrorist group, to its list of people subject to US sanctions.

The action came after Iraq released Daqduq from detention due to lack of sufficient evidence for charges that he was behind a 2007 raid that led to the deaths of five US soldiers.

Daqduq "is a dangerous Hezbollah operative responsible for planning and carrying out numerous acts of terrorism in Iraq," David Cohen, under secretary for Terrorism and Financial Intelligence, said in a statement.

"The United States is extremely disappointed he was allowed to go free and we will continue our efforts to bring him to justice."

The designation of Daqduq, under an executive order, freezes any assets he may have in the United States and prohibits US citizens from transactions with him. Hezbollah already is under sanctions as a terrorist organization.

Daqduq was captured in 2007 on suspicion that he had helped organize the deadly raid and was held by US troops until December 2011, when he was handed over to Iraqi authorities.

An Iraqi official on Friday confirmed the release without saying when it took place, and said he had left the country for Lebanon.

The Treasury Department said Daqduq was released Friday.

The release sparked an outcry from the US State Department.

"We continue to believe that Daqduq should be held accountable for his crimes. We've made this point very clearly to the government of Iraq," State Department spokeswoman Victoria Nuland said Friday.

Nuland told journalists Washington would pursue other means to have Daqduq brought to justice and confirmed the United States had been in touch with Lebanon about his case, without saying if it had asked for his arrest.