TEHRAN, Aug 22 (Reuters) - Iranian intelligence has uncovered a separatist group in an oil-rich province bordering Iraq, arresting members and seizing weapons, Iranian media said on Wednesday.

The group sought to sow division and spread different sectarian religious beliefs in Khuzestan, ISNA news agency and other media reports said.

The southwestern province, heartland of the oil industry in the world's number four producer, was last year simmering with unrest among its substantial Arab population. Some have complained of discrimination by Tehran.

"The public relations office of the Intelligence Ministry announced that members of a separatist group were arrested in the last few days in Khuzestan province," ISNA said.

"In places where they were hiding considerable amounts of weapons have been found," it said, but gave no details.

Although Iran and Iraq are predominantly Shi'ite Muslim, Khuzestan's population includes Sunni Arabs.

Last November, Iran's judiciary declared an ethnic Arab party illegal, accusing it of instigating unrest and opposing the Islamic system in Ahvaz, capital of Khuzestan.

Just over half of Iran's 70 million people are Persians, with the rest ethnic Azeris, Kurds, Arabs, Turkmen, Baluchis and Lors. About 3 percent are Arabs and authorities are sensitive about discontent in Arab territories.

AlertNet news is provided by