Intelligence from Baghdad suggested that "approximately $1bn was taken from the Iraqi central bank by Saddam and his family just prior to the start of combat".
According to an Iraqi banking official quoted by yesterday's New York Times, Qusay Hussein, Saddam's second son, arrived at the bank in Baghdad at 4am on March 18, seized around $900m in $100 bills and a further $100m in euros, loaded them into three tractor-trailers and left.
No explanation was given as to what would be done with the money or where it was being taken. "When you get an order from Saddam Hussein, you do not discuss it," said the official, who would not be identified. A special forces officer in the US army, Col Ted Seel, said he had known about the seizure and that some tractor-trailers had crossed into Syria, although it was not known what was in them.
Qusay came to the bank with Amid al-Hamid Mahmood, the former president's personal assistant and a letter from Saddam authorising the withdrawal. It took a team of workers two hours to load the money, which was taken away before most of the bank's employees reported for work.
A few hours later, acting on intelligence information of Saddam's precise whereabouts, America launched its first missile attack, aimed at killing the dictator and his inner circle.
Qusay and Saddam's eldest son, Uday, are understood to be negotiating the terms of a surrender with a secret go-between. According to the Wall Street Journal the discussions are being conducted by an intermediary thought to be an American citizen of Iraqi origin who retains top-level contacts in Baghdad.
Pentagon sources confirmed talks are imminent which may finally persuade Qusay and Uday to give themselves up.
The most recent heist follows a pattern of kleptocratic behaviour that gathered pace in the last days of Saddam's regime, with millions of dollars being transferred into private accounts abroad, according to Middle Eastern banking sources. A flurry of transfers, going mainly through Europe to accounts in Jordanian and Palestinian banks, was estimated at between $5bn and $40bn, with at least five transfers of between $100,000 and $1m going to just one bank, one US investigator told the Guardian.
News of the seizure, which was confirmed by an American treasury official designated to work with his Iraqi counterparts to rebuild the financial system, prompted fears that it may have crossed the border into Syria and could be used to fund "post-occupation resistance".
But others argue that the bulk of that amount of cash would make it difficult to hide for long. "If you had $900m dollars you would need two or three flatbed trucks to carry it all away," said George Mullinax, a Treasury department official.
Mr Mullinax said it was possible that a large amount of the money had been recovered. An American sergeant found $650m in $100 dollar bills in one of Saddam's palaces recently which may have been taken from the central bank. However, the Iraqi official interviewed by the New York Times insisted that money belonged to Uday.
· Saddam Hussein is alive and well in Iraq, according to a Yemeni friend who once studied with him in Egypt. Qassem Salam, secretary-general of Yemen's Arab Socialist Ba'ath party, said he had received a verbal message that Saddam and all Iraq's former leaders were "well and in safe places".
Mr Salam, who was in Iraq throughout the war, told the London-based daily al-Quds al-Arabi that the deposed president was preparing to organise resistance against the Americans that "will be decisive and historic".
Speaking from Yemen, he said Saddam had personally led a battle against US forces who seized Baghdad airport but was later betrayed by commanders of his Republican Guards who believed the war was already lost.