The chief investigating judge of Iraq's Central Criminal Court said Monday that he had "temporarily dismissed" a counterfeiting case against Ahmed Chalabi, the exile leader who was supported by the Pentagon before the war but became a leading critic of the U.S. occupation.

The judge, Zuhair Maliky, had opened an investigation of Chalabi and issued an arrest warrant for him after police found counterfeit currency in the house where Chalabi was living. But Maliky said in an interview that the case had been dismissed for the time being because there was not sufficient proof that the house, a Chinese-style mansion in an affluent Baghdad neighborhood, was owned by Chalabi.

Attorneys for Chalabi had argued that the house was the headquarters for his political organization, the Iraqi National Congress, and that numerous people had access to the premises, the judge said.

"The Chinese house where the money was found is the residence of Ahmed Chalabi or the headquarters of the INC," Maliky said. "If it is the residence, he is the major suspect, but if it is the headquarters of the INC, which may be used by other people, he will not be the primary suspect."

Maliky said the plaintiff in the case, the Central Bank of Iraq, could not prove that it was Chalabi's house. The judge also said that Chalabi had presented witnesses who testified that the house belonged to the INC.

The argument used to dismiss the charges is different from the defense Chalabi put forward in August, when Maliky issued an arrest warrant for him. At the time, Chalabi acknowledged that he possessed counterfeit currency, but said the notes were samples used for a meeting with Iraq's Central Bank in his capacity as chairman of the finance committee of the now-disbanded Governing Council. He has said that the value of the counterfeit currency in his house was 3,000 dinars, or about $2.

Chalabi could not be reached for comment Monday. A Chalabi aide, Haider Mousawi, told the Associated Press on Friday that "they are not going to find any evidence against Chalabi, because there was no evidence from the beginning."

Formal charges were never filed by the judge.

Maliky said the case was dismissed about 10 days ago but that it could be reopened if further investigations produced evidence of wrongdoing.

Before the U.S.-led war that toppled Saddam Hussein's government, Chalabi was a favorite of many in the Pentagon to lead Iraq. But in the following months, he fell out of favor with the U.S. government because of his criticism of postwar U.S. policy in Iraq and his efforts to forge close ties with neighboring Iran. He has also been a longtime rival of the interim prime minister, Ayad Allawi.

In 1992, a Jordanian court convicted Chalabi in absentia of embezzlement and fraud after a bank he ran collapsed with about $300 million in missing deposits. He was sentenced to 22 years in prison. Chalabi, who fled Jordan before the case went to trial, has long denied the charges, which he has accused Hussein of orchestrating.

In other developments Monday, two soldiers with the U.S. 1st Infantry Division were killed near Balad, north of Baghdad, the Associated Press reported. The first died in a vehicle accident and the second was killed when a patrol, returning from the crash scene, came under attack, the military said.

The AP also reported that car bomb attacks killed at least seven Iraqi National Guardsmen in the northern city of Mosul and at a checkpoint near Fallujah.