Al-Qaida's two most senior leaders in Iraq have been hunted down and killed, it was announced on Monday, a development hailed by US vice president Joe Biden as a potentially "devastating" blow to the terrorist organisation.

Nouri al-Maliki displays photos of the dead al-Qaida chiefs Abu Omar al-Baghdadi at a press conference. (Photograph: -/AFP/Getty Images) Iraq's prime minister, Nouri al-Maliki, said an intelligence team backed by US forces had killed Abu Ayyoub al-Masri, al-Qaida's leader in the country, and Abu Omar al-Baghdadi, the purported head of its affiliate, the Islamic State of Iraq. The two died on Sunday in a rocket attack on a home where they were hiding near Tikrit in the northern province of Salahuddin.

"The death of these terrorists is potentially the most significant blow to al-Qaida in Iraq (AQI) since the beginning of the insurgency," said General Raymond T Odierno, commander of US forces in Iraq.

Maliki showed reporters pictures of two corpses, which he said had been identified through DNA tests. Reports from Baghdad said computer equipment seized with them showed communications with al-Qaida leaders including Osama bin Laden.

Biden described their deaths as a "devastating blow" to al-Qaida in Iraq.

"But equally important in my view is this action demonstrates the improved security strength and capacity of Iraqi security forces," Biden said. "The Iraqis led this operation, and it was based on intelligence the Iraqi security forces themselves developed following their capture of a senior AQI leader last month."

Biden said a soldier accompanying the Iraqis was killed, but the name was being withheld until family was informed.

Toby Dodge at the International Institute for Strategic Studies in London called the operation a coup for Iraqi intelligence. "This is clearly a victory in propaganda terms and possibly also in terms of capacity," he said. "We'll have to see over the next weeks and months if the tempo of mass casualty attacks drops off or not."

Masri, an Egyptian veteran of the Afghan anti-Soviet jihad, replaced Abu Musab al-Zarqawi, the Jordanian founder of AQI, who was killed in a US airstrike with the help of Jordanian intelligence agents in 2006.

Baghdadi was a more shadowy figure who, it had been reported by US officials, operated under a false name dreamed up to give an Iraqi face to a foreign-run terrorist group. He was identified under his real name, Hamid Dawud Muhammad Khalil al-Zawi.

Both men featured prominently in jihadi publications and had been reported killed or captured several times before. Analysts normally counsel caution in such cases, especially since Maliki is keen to bolster his image as a strongman amid the uncertainty about the outcome of Iraq's March parliamentary election. But the US statement may dispel such doubts.

Earlier this month, the Islamic State in Iraq claimed responsibility for triple suicide bombings that hit foreign embassies in the capital, killing 30 people and injuring 200 others. These and other attacks fuelled concerns that al-Qaida was making a comeback in the post-election impasse.AQI intensified its attacks last year as US forces began to withdraw.

In a separate development, Iraq's independent electoral commission on Monday ordered a manual recount of ballots cast in Baghdad nearly six weeks ago. The recount could affect who becomes the next prime minister after Iyad al-Alawi emerged with a narrow lead over Maliki.

The incumbent had wanted votes recounted in five provinces, and complained that the electronic system of counting was unreliable. But Baghdad accounts for 68 seats in the 325-seat parliament, so even a slightly different result there could change the overall outcome.

Alawi's Iraqiya list, a cross-sectarian group backed by minority Sunnis, came first with 91 seats. Maliki's State of Law won 89 seats while his erstwhile Shia allies in the Iraqi National Alliance gained about 70. Kurds together control 58 seats.

"There has been no sustained evidence of substantial or nationally-orchestrated election fraud in Baghdad so the decision to move to a manual recount of Baghdad's vote makes it look as if they have succumbed to the politically-motivated demands of Maliki," said Dodge.

"This is very worrying because it casts a shadow over the whole election, allowing the politically powerful to challenge the outcome of a vote they did not win simply because of their grip on state institutions."