BLOEMFONTEIN, South Africa (AFP) - A rampant Spain remain on track to equal Brazil's record unbeaten streak after extending their own unbeaten run to 34 games by beating Iraq 1-0 at the Confederations Cup.

A goal by Valencia striker David Villa, at the centre of transfer speculation with Manchester United and Barcelona reportedly interested, was enough to break down a tough Iraqi defence.

It put them into the semi-finals and moved the European champions even closer to equalling the 35-match unbeaten run by Brazil between 1993 and 1996.

It also ensured their place in the record books by matching the 14 straight victories held by Australia, Brazil and France.

In the semis Spain will either play Italy, or Brazil.

Coach Vicente del Bosque, who was won all 12 matches since he has been in charge, said he was proud to be working with such a talented group of players, led by the likes of Villa and his strike partner Fernando Torres.

"I'm very happy that this group is breaking records and creating new runs by the day," he said.

"Villa and Torres could play in any team in the world."

But it wasn't easy against Iraq, who played an effective defensive game with five men at the back.

"It was really tough and hard to find our rythem but we got the goal and it took us to the semi-finals which was the main goal," added Del Bosque.

Despite losing, wily Iraq coach Bora Milutinovic said it was a sweet defeat.

"It was a dream for my players to play against Spain and to put up that sort of performance really makes me proud," said the veteran Serb.

"They played very intelligently. I'm very, very happy for Iraq."

Del Bosque was forced to start without Arsenal captain Cesc Fabregas who limped out of training on Tuesday after a strong tackle by Liverpool midfielder Xabi Alonso.

He also rested Carles Puyol, Albert Reira and Raul Albiol, with Carlos Marchena, Gerard Pique, Juan Manuel Mata and Santi Cazorla in the starting 11.

Milutinovic also rested several players with his focus on their last match of the group stages against New Zealand, which he believes they can win.

Compared to their 5-0 thrashing of New Zealand on Sunday, this was a much tougher test for Spain.

It took them eight minutes to unleash their first shot when Cazorla's left foot strike was easily gathered by goalkeeper Mohammed Kassid.

Pique's glancing header went close on 15 minutes and Torres, Spain's hat-trick hero against New Zealand, almost got on the end of a looping Xavi through ball minutes later.

Spain's best chance came midway through the half when Cazorla fired a cross in from the right to find an unmarked Villa whose left-foot volley whistled past the post.

Spain were threatening a goal but a composed Iraq held tight, getting bodies behind the ball effectively and they went to the break all square.

The European champions upped the tempo after the restart and Villa should have buried a golden opportunity eight minutes into the half when he fired a close range header straight at the goalkeeper.

But he made no mistake a minute later when he got on the end of a Joan Capdevila cross and angled his header into the right-hand corner to break the deadlock.

It fired up Spain with Alonso, Torres and Mata all going close but Iraq never gave up, fighting bravely to the bitter end but unable to draw level.