September 13, 2006 -- WASHINGTON - Taliban terror leaders who had gathered for a funeral - and were secretly being watched by an eye-in-the-sky American drone - dodged assassination because U.S. rules of engagement bar attacks in cemeteries, according to a shocking report.

U.S. intelligence officers in Afghanistan are still fuming about the recent lost opportunity for an easy kill of Taliban honchos packed in tight formation for the burial, NBC News reported.

The unmanned airplane, circling undetected high overhead, fed a continuous satellite feed of the juicy target to officers on the ground.

"We were so excited. I came rushing in with the picture," one U.S. Army officer told NBC.

But that excitement quickly turned to gut-wrenching frustration because the rules of engagement on the ground in Afghanistan blocked the U.S. from mounting a missile or bomb strike in a cemetery, according to the report.

Pentagon officials declined comment and referred The Post to Central Command officers in Afghanistan, who did not respond to a request for comment or explanation.

Agonizingly, Army officers could do nothing but watch the pictures being fed back from the drone as the Taliban splintered into tiny groups - too small to effectively target with the drone - and headed back to their mountainside hideouts.

Military experts told The Post that rules of engagement are constantly adjusted on the ground in Afghanistan and Iraq, depending on the severity of the threat posed by the enemy.

In Iraq, gun battles have raged inside cemeteries in Fallujah, and once-off-limits mosques are now subject to U.S. searches.