BAGHDAD, Iraq — A roadside bomb containing sarin nerve agent (^) recently exploded near a U.S. military convoy, the U.S. military said Monday.

Bush administration officials told Fox News that mustard gas (^) was also recently discovered.

Two people were treated for "minor exposure" after the sarin incident but no serious injuries were reported.   Soldiers transporting the shell for inspection suffered symptoms consistent with low-level chemical exposure, which is what led to the discovery, a U.S. official told Fox News.

"The Iraqi Survey Group confirmed today that a 155-millimeter artillery round containing sarin nerve agent had been found," Brig. Gen. Mark Kimmitt (^), the chief military spokesman in Iraq, told reporters in Baghdad.  "The round had been rigged as an IED (improvised explosive device) which was discovered by a U.S. force convoy."

The round detonated before it would be rendered inoperable, Kimmitt said, which caused a "very small dispersal of agent."

A senior Bush administration official told Fox News that the sarin gas shell is the second chemical weapon discovered recently.

Two weeks ago, U.S. military units discovered mustard gas that was used as part of an IED.  Tests conducted by the Iraqi Survey Group (^) and others concluded the mustard gas was "stored improperly," which made the gas "ineffective."

They believe the mustard gas shell may have been one of 550 for which former Iraqi President Saddam Hussein failed to account when he made his weapons declaration shortly before Operation Iraqi Freedom began last year.

Investigators are trying to determine how insurgents obtained these weapons — whether they were looted or supplied.

It also appears some top Pentagon officials were taken by surprise by Kimmitt's announcement of the sarin discovery; they thought the matter was classified, administration officials told Fox News.

Kimmitt said the shell belonged to a class of ordnance that Saddam Hussein's government said was destroyed before the 1991 Gulf war (^).  Experts believe both the sarin and mustard gas weapons date back to the Persian Gulf War.

"It was a weapon that we believe was stocked from the ex-regime time and it had been thought to be an ordinary artillery shell set up to explode like an ordinary IED and basically from the detection of that and when it exploded, it indicated that it actually had some sarin in it," Kimmitt said.

The incident occurred "a couple of days ago," he added. The discovery reportedly occurred near Baghdad International Airport.

It was the first announcement of the discovery of such a weapon on which Washington made its case for war.   Washington officials say the significance of the find is that some chemical shells do still exist in Iraq, and it's thought that fighters there may be upping their attacks on U.S. forces by using such weapons.

The Iraqi Survey Group is a U.S. organization whose task was to search for weapons of mass destruction after the ouster of Saddam Hussein in last year's invasion.

The round was an old "binary-type" shell in which two chemicals held in separate sections are mixed after firing to produce sarin, Kimmitt said.

He said he believed that insurgents who rigged the artillery shell as a bomb didn't know it contained the nerve agent, and that the dispersal of the nerve agent from such a rigged device was very limited.

"The former regime had declared all such rounds destroyed before the 1991 Gulf War," Kimmitt said.  "Two explosive ordinance team members were treated for minor exposure to nerve agent as a result of the partial detonation of the round."

The shell had no markings.  It appears the binary sarin agents didn't mix, which is why there weren't serious injuries from the initial explosion, a U.S. official told Fox News.

Not everyone found the deadly artillery surprising.

"Everybody knew Saddam had chemical weapons, the question was, where did they go.  Unfortunately, everybody jumped on the offramp and said 'well, because we didn't find them, he didn't have them,'" said Fox News military analyst Lt. Gen. Tom McInerney.

"I doubt if it's the tip of the iceberg but it does confirm what we've known ... that he [Saddam Hussein] had weapons of mad destruction that he used on his own people," Sen. Charles Grassley, R-Iowa, told Fox News. "This does show that the fear we had is very real. Now whether there is much more of this we don't know, Iraq is the size of the state of California."

But there were more than weapons to the need to depose of Saddam, he added. "We considered Saddam Hussein a threat not just because of weapons of mass destruction," Grassley said.

Iraqi Scientist: You Will Find More

Gazi George, a former Iraqi nuclear scientist under Saddam's regime, told Fox News that he believes many similar weapons stockpiled by the former regime were either buried underground or transported to Syria.  He noted that the airport where the device was detonated is on the way to Baghdad from the Syrian border.

George said the finding likely will just be the first in a series of discoveries of such weapons.

"Saddam is the type who will not store those materials in a military warehouse.  He's gonna store them either underground, or, as I said, lots of them have gone west to Syria and are being brought back with the insurgencies," George told Fox News.  "It is difficult to look in areas that are not obvious to the military's eyes.

"I'm sure they're going to find more once time passes," he continued, saying one year is not enough for the survey group or the military to find the weapons.

Saddam, when he was in power, had declared that he did in fact possess mustard-gas filled artilleries but none that included sarin.

"I think what we found today, the sarin in some ways, although it's a nerve gas, it's a lucky situation sarin detonated in the way it did ... it's not as dangerous as the cocktails Saddam used to make, mixing blister" agents with other gases and substances," George said.

Officials: Discovery Is 'Significant'

U.S. officials told Fox News that the shell discovery is a "significant" event.

Artillery shells of the 155-mm size are about as big as it gets when it comes to the ordnance lobbed by infantry-based artillery units.  The 155 howitzer can launch high capacity shells over several miles; current models used by the United States can fire shells as far as 14 miles.  One official told Fox News that a conventional 155-mm shell could hold as much as "two to five" liters of sarin, which is capable of killing thousands of people under the right conditions in highly populated areas.

The Iraqis were very capable of producing such shells in the 1980s but it's not as clear that they continued after the first Gulf War, so officials are reluctant to guess the age of the shell or the capacity of the Iraqis prior to Operation Iraqi Freedom to produce such shells.

In 1995, Japan's Aum Shinrikyo (^) cult unleashed sarin gas in Tokyo's subways, killing 12 people and sickening thousands.  In February of this year, Japanese courts convicted the cult's former leader, Shoko Asahara, and sentence him to be executed.

Developed in the mid-1930s by Nazi scientists, a single drop of sarin can cause quick, agonizing choking death.   There are no known instances of the Nazis actually using the gas.

Nerve gases work by inhibiting key enzymes in the nervous system, blocking their transmission.  Small exposures can be treated with antidotes, if administered quickly.

Antidotes to nerve gases similar to sarin are so effective that top poison gas researchers predict they eventually will cease to be a war threat.

Fox News' Wendell Goler, Steve Harrigan, Ian McCaleb, Liza Porteus, James Rosen and The Associated Press contributed to this report.