Oy.

Just when you thought that the incompetence in the "War on Terror" couldn't get worse.

Our Iraqi informants lie to us.

WASHINGTON (CNN) -- Information that led to heightened security for the New York City transit system was a hoax, government sources said Tuesday.

The sources said an informant in Iraq who provided the tip had told investigators there was a terrorist plot involving New York's subway system. That informant admitted he gave false information, the sources said.

Law enforcement sources said last week the person who passed along the New York tip also gave information that prompted a military operation in Iraq, which led to the arrests of three al Qaeda suspects in Musayyib, about 45 miles south of Baghdad.

Government sources said the three men arrested in Iraq with suspected links to the possible plot had been interviewed and underwent lie detector tests showing they knew nothing about such a plan.