Order Code RS22323
Updated May 14, 2008
Iran’s Activities and Influence in Iraq
Kenneth Katzman
Specialist in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division
Summary
Iran is materially assisting all major Shiite Muslim political factions in Iraq, most
of which have longstanding ideological, political, and religious ties to Tehran, and their
armed militias. The Administration notes growing involvement by Tehran in actively
directing, training, and arming Shiite militiamen linked, to varying degrees, to hardline
cleric Moqtada Al Sadr. Some analysis goes so far as to see a virtual “proxy war”
between the United States and Iran inside Iraq. This report will be updated. See CRS
Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.
Background
Iran’s activities and influence in Iraq affects the U.S. effort to stabilize Iraq and also
colors the U.S. perception of Iran’s nuclear and regional ambitions. With the
conventional military and weapons of mass destruction (WMD) threat from Saddam
Hussein removed, the thrust of Iran’s strategy in Iraq has been to acquire “strategic
depth” in Iraq by perpetuating domination of Iraq’s government by pro-Iranian Shiite
Islamists. Doing so gives Iran leverage in the event of a broader confrontation with the
United States. At the same time, Iran’s aid to Iraqi Shiite militias worsened the Sunni-
Shiite violence, now reduced by the U.S. “troop surge” in 2007, and accelerated
competition among Shiite factions in southern Iraq, which erupted in major violence in
Basra and Baghdad in late March 2008.
During 2003-2005, Iran’s leaders supported the decision by Iraqi Shiite Islamist
factions in Iraq to work with the U.S.-led election process, because the number of Shiites
in Iraq (about 60% of the population) virtually ensured Shiite dominance of an elected
government. To this extent, Iran’s goals in Iraq did not conflict with U.S. policy, which
was to set up a democratic process. A Shiite Islamist bloc (“United Iraqi Alliance”),
encompassing the Islamic Supreme Council of Iraq (ISCI), the most pro-Iranian of the
groups, the Da’wa (Islamic Call) party, and the faction of the 32 year old Moqtada Al
Sadr — won 128 of the 275 seats in the December 15, 2005, election for a full term
parliament. Most ISCI leaders spent their years of exile in Iran. Prime Minister Nuri al-
Maliki is from the Da’wa Party, although he spent most of his exile in Syria. The Sadr
faction’s ties to Iran were initially less extensive because his family remained in Iraq

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during Saddam’s rule. Still, the Sadr clan has ideological ties to Iran; Moqtada’s great
uncle, Mohammad Baqr Al Sadr, was a political ally of Iran’s Ayatollah Ruhollah
Khomeini and was hung by Saddam Hussein in 1980. Iran later came to see Sadr’s
faction — which has 30 seats in parliament, a large and dedicated following, particularly
among lower-class Iraqi Shiites — as a growing force in Iraq. He built a “Mahdi Army”
(Jaysh al-Mahdi, or JAM) after Saddam’s fall, which might now number about 60,000
fighters and which could be used by Iran to retaliate against the United States in the event
of a U.S.-Iran confrontation. U.S. military operations put down JAM uprisings in April
2004 and August 2004 in “Sadr City” (Sadr stronghold in east Baghdad), Najaf, and other
Shiite cities. In each case, fighting was ended with compromises under which JAM forces
stopped fighting in exchange for amnesty for Sadr.
ISCI’s militia, the “Badr Brigades” (now renamed the “Badr Organization”),
numbered about 15,000. The Badr Brigades were recruited, trained, and armed by Iran’s
Revolutionary Guard, politically aligned with Iran’s hardliners, during the 1980-88 Iran-
Iraq war. During that war, Badr guerrillas conducted attacks from Iran into southern Iraq
against Baath Party officials, but did not shake the regime. During 2005-6, with the help
of an ISCI member (Bayan Jabr) as Interior Minister, it burrowed into the Iraqi Security
Forces (ISF). Badr fighters in and outside the ISF were purportedly been involved in
sectarian killings of Sunnis, although to a lesser extent than Sadr’s JAM. These killings
accelerated after the February 2006 bombing of the Al Askari Mosque in Samarra.
Iran’s efforts to promote Shiite solidarity began to unravel in 2007 when Prime
Minister Maliki agreed to fully cooperate with the U.S. “troop surge” by allowing U.S.
forces to pressure Sadr’s JAM militia. Maliki’s stance ended his alliance with Sadr and,
by August 2007 Sadr had pulled his five ministers out of the cabinet, and his 30
parliamentarians out of the UIA bloc. As the political rift widened, JAM fighters were
occasionally battling Badr-dominated Iraqi government forces, and U.S. and British
forces, for control of such Shiite cities as Diwaniyah, Karbala, Hilla, Nassiryah, Basra,
Kut, and Amarah. This caused a backlash among Iraqi Shiite civilians often victimized
by the fighting, particularly after August 2007 JAM-Badr clashes in Karbala, and, in
August 2007, Sadr declared a six month “suspension” of JAM activities; he extended the
ceasefire in February 2008 for another six months. At the same time, according to
testimony by General David Petraeus (overall U.S. commander in Iraq) on April 8-9,
2008, Iran, through its Revolutionary Guard Qods Force and assisted by Lebanese
Hezbollah, continued to arm, train, and direct “Special Groups” of breakaway JAM
fighters who were ignoring the Sadr “ceasefire” to continue fighting and attacking U.S.
installations in Baghdad. The intra-Shiite conflict had space to accelerate as Britain drew
down its forces the Basra area. In September 2007, Britain withdrew from Basra city to
the airport, reduced its forces from 7,000 to 4,000, and transferred Basra Province to ISF
control on December 16, 2007.

Assertions of Iranian Support to Armed Groups
Iranian material support to militias in Iraq, particularly the “Special Groups,” has
added to U.S.-Iran tensions over Iran’s nuclear program and regional ambitions, such as
its aid to Lebanese Hezbollah. In providing weaponry, Iran may be seeking to develop
a broad range of options in Iraq that includes pressuring U.S. and British forces to leave
Iraq, or to bog down the United States militarily and thereby deter it from military or
diplomatic action against Iran’s nuclear program. In August 2007, Iranian President

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Mahmoud Ahmadinejad heightened U.S. concerns about Iran’s long term intentions by
saying that Iran would fill a “vacuum” that would be left by a U.S. withdrawal from Iraq.
Senior U.S. officials have, over the past few years, provided specific information on Qods
Force and Hezbollah aid to Iraqi Shiite militias. No firm information exists on how many
Iranian agents might be in Iraq, but one press report said there are 150 Qods and
intelligence personnel in Iraq.1
! On February 11, 2007, U.S. military briefers in Baghdad provided what
they said was specific evidence that Iran had supplied armor-piercing
“explosively formed projectiles” (EFPs) to Shiite militias. EFPs have
been responsible for over 200 U.S. combat deaths since 2003. In August
2007, Gen. Raymond Odierno, then number two U.S. commander in Iraq,
said that Iran had supplied the Shiite militias with 122 millimeter
mortars that are used to fire on the Green Zone in Baghdad.
! On July 2, 2007, Brig. Gen. Kevin Begner was the first senior U.S.
commander to say that Lebanese Hezbollah was assisting Iran in training
and channeling weapons to Iraqi Shiite militias. He added that Iran
gives about $3 million per month to these Iraqi militias. He based the
statement on the March 2007 capture — in connection with a January
2007 attack that killed five U.S. forces in Karbala — of former Sadr aide
Qais Khazali and Lebanese Hezbollah operative Ali Musa Daqduq.
! In his September 10 and 11, 2007 testimony to Congress – and repeated
in similar comments in his update testimony during April 8-9, 2008,
General Petraeus, said that Iran is seeking to turn the Special Groups
into a “Hezbollah-like force to serve [Iran’s] interests and fight a proxy
war against the Iraqi state and coalition forces....” On October 7, 2007,
Gen. Petraeus told journalists that Iran’s Ambassador to Iraq, Hassan
Kazemi-Qomi, is a member of the Qods Force.
! Amid increasingly strong statements by U.S. military leaders about
Iran’s “malign” influence in Iraq, including reports that Iran is
increasingly using Lebanese Hizballah as an intermediary to train Iraqi
militias, General Petraeus had said there would be a U.S. briefing on new
information on Iranian aid to the JAM in May 2008. The briefing
reportedly has been postponed to provide time for Iraqi negotiators to
confront Iran with the information on its involvement. An Iraqi
parliamentary group visited Iran in late April 2008 but to no obvious
major result on this issue; an Iraqi commission reportedly is investigating
Iran’s aid to the JAM.
In moving to curb Qods Force activity in Iraq, from December 2006-October 2007,
U.S. forces arrested a total of 20 Iranians in Iraq, many of whom are alleged to be Qods
Forces officers. Of these, five were arrested in January 2007 in a liaison office in the
Kurdish city of Irbil. On November 9, 2007, U.S. officers released 9 of the 20, releasing
1 Linzer, Dafna. “Troops Authorized To Kill Iranian Operatives in Iraq,” Washington Post,
January 26, 2007.

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1 more on December 20, but continue to hold 10 that are believed of the most
intelligence value. On March 24, 2007, the U.N. Security Council unanimously adopted
Resolution 1747 on the Iran nuclear issue; it has a provision banning arms exports by
Iran, a provision clearly directed at Iran’s arms supplies to Iraq’s Shiite militias and
Lebanese Hezbollah. In September 2007, the U.S. military said that, to stop the flow of
Iranian weaponry, it had built a base near the Iranian border in Wasit Province, east of
Baghdad. The base and related high technology border checkpoints are manned, in part,
by the 2,000 forces sent by the republic of Georgia. In an effort to financially squeeze
the Qods Force, on October 25, 2007, the Bush Administration designated the Qods
Force, under Executive Order 13224, as a provider of support to terrorist organizations.
At the same time, the Administration designated the Revolutionary Guard and several
affiliated entities and persons, under Executive Order 13382, as of proliferation concern.
The designations had the effect of freezing any U.S.-based assets of the designees and
preventing any transactions with them by U.S. persons, but neither the Guard or the Qods
Force was named a Foreign Terrorist Organizations (FTOs), as was recommended by
H.R. 1400, passed by the House on September 25, 2007, and a provision of the FY2008
defense authorization bill (P.L. 110-181). However, the effect on the Qods Force and on
the Guard is likely to be limited because they do not likely have any U.S.-based assets and
most U.S.-Iran trade is banned.
On January 9, 2008, the Treasury Department took action against suspected Iranian
and pro-Iranian operatives in Iraq by designating them as a threat to stability in Iraq under
a July 17, 2007 Executive Order 13438. The penalties are a freeze on their assets and a
ban on transactions with them. The named entities are: Ahmad Forouzandeh,
Commander of the Qods Force Ramazan Headquarters, who is accused of fomenting
sectarian violence in Iraq and of organizing training in Iran for Iraqi Shiite militia fighters;
Abu Mustafa al-Sheibani, the Iran-based leader of network that funnels Iranian arms to
Shiite militias in Iraq; and Isma’il al-Lami (Abu Dura), a Shiite miltia leader – who has
broken from the JAM – alleged to have committed mass kidnappings and planned
assassination attempts against Iraqi Sunni politicians
The March 2008 fighting in southern Iraq cast significant doubt on the effectiveness
of the U.S. counter-measures. As of early 2008, U.S. officials had been asserting that
Shiite militia attacks on U.S. forces and Iranian weapons shipments were generally
diminishing. However, Maliki perhaps feared Sadrist strength in provincial elections
now planned for October 1, 2008 and felt threatened by Fadhila party control of the Basra
and Umm Qasr port operations. On March 25, 2008, Maliki, with ISCI backing,
launched an ISF offensive to clear JAM and Fadhila militiamen from Basra, particularly
the port area which these militias control. In an operation that Gen. Petraeus has called
“poorly planned,” the ISF - possibly dominated by Badr loyalists - were unable to end
militia influence in Basra or other cities. U.S. and British forces intervened with air
strikes and military advice during the height of the fighting, but at least 1,300 of the extra
7,000 ISF involved defected or refused to fight, further disparaging analyst assessments
of ISF capabilities, although the Administration said many ISF units performed well.
Sadr, who reportedly received Iranian aid during the fighting agreed to an Iran-brokered
“ceasefire” on March 30, 2008, but from a position of strength. Some fighting and JAM
rocketing of U.S. installations in Baghdad have continued subsequently, in some cases
producing deaths of U.S. soldiers, and U.S. forces continue to fight JAM elements in Sadr
City, while the ISF has taken increasing control in Basra. On April 6, 2008, Maliki
demanded Sadr disband the JAM as a condition for participating in the provincial

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elections. There is increasing discussion among experts about a possible U.S. military
move to stop the Iranian aid, potentially including strikes on Iranian rocket factories or
shipments into Iraq.
Efforts to Negotiate With Iran. Another means of curbing Iran’s activities in
Iraq has been direct diplomacy with Iran. The report of the Iraq Study Group (December
2006) recommended that the United States include Iran (and Syria) in multilateral efforts
to stabilize Iraq. Previously, U.S. officials had offered to engage Iran on the issue, but
U.S. officials opposed Iran’s efforts to expand discussions to bilateral U.S.-Iran issues
and no talks were held. In a shift that might have been caused by Administration
assessments that U.S. military and economic pressure on Iran was increasing U.S.
leverage, the United States attended regional conferences “Expanded Neighbors
Conference”) in Baghdad on March 10, 2007, in Egypt during May 3-4, 2007, and in
Kuwait on April 22, 2008. Secretary of State Rice and Iranian Foreign Minister Mottaki
held no substantive bilateral discussions at these meetings. As an outgrowth of the
regional meetings, the United States and Iran have held bilateral meetings in Baghdad on
the Iraq issue, led by U.S. Ambassador to Iraq Ryan Crocker and Iranian Ambassador
Kazemi-Qomi. The first was on May 28, 2007. A second round, held on July 24,
resulted in establishment of a working group to discuss ways to stabilize Iraq; it met for
the first time on August 6, 2007. In consideration of more recent assessments that Iran
was reducing its weapons shipments into Iraq, more talks in Baghdad were scheduled for
December 18, 2007, but were postponed – and still have not been held – because Iran
wants this round to be at the ambassadorial level, not working group talks. The United
States believes that the working group should meet first, and then the talks could move
to ambassador level. In early May 2008, Iran said it would not continue the dialogue
because U.S. forces are causing civilian casualties in the continuing Sadr City fighting.

Iranian Influence Over Iraqi Political Leaders
Iran has exercised substantial political and economic influence on the post-Saddam
Iraqi government, although Iran’s initiatives do not necessarily conflict with the U.S. goal
of reconstructing Iraq. During exchanges of high-level visits in the summer of 2005,
including one led by interim Prime Minister Ibrahim al-Jafari in July, Iraqi officials took
responsibility for starting the 1980-1988 Iran-Iraq war, and indirectly blamed Saddam
Hussein for using chemical weapons against Iranian forces during that conflict. During
a related defense ministerial exchange, the two signed military cooperation agreements,
as well as agreements to open diplomatic facilities in Basra and Karbala and to begin
transportation and energy links (oil swaps, provision of cooking fuels and 2 million liters
per day of kerosene to Iraqis and future oil pipeline connections). In response to U.S.
complaints, Iraqi officials have said that any Iran-Iraq military cooperation would be
limited to border security, landmine removal, and information sharing. In 2005, Iran
extended Iraq a $1 billion credit line as well, some of which is being used to build roads
in the Kurdish north and a new airport near Najaf, a key entry point for the estimated
20,000 Iranian pilgrims visiting the Imam Ali Shrine there each month. The two countries
have developed a free trade zone around Basra, which buys electricity from Iran, and Iraq
is now Iran’s second largest non-oil export market, buying about $2 billion worth of
goods from Iran during 2007. Iran has opened consulates in Irbil and Sulaymaniyah.
Shortly after the Maliki government took office on May 20, 2006, Iran’s Foreign
Minister Manuchehr Mottaki led a visit to Iraq, during which Iraq’s Foreign Minister,

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Hoshyar Zebari supported Iran’s right to pursue “peaceful” nuclear technology, while
also stating that Iraq does not want “any of [its] neighbors to have weapons of mass
destruction.”2 Maliki visited Iran during September 13-14, 2006, signing agreements to
on cross border immigration, intelligence sharing, and commerce, and threatening to expel
the 3,400 members of the Iranian opposition group People’s Mojahedin Organization of
Iran (PMOI), based in Iraq during Saddam’s rule and now confined by U.S.-led forces
to a camp near the Iranian border. During Maliki’s visit to Iran during August 8-9, 2007
— during which the Iranian pledge to curb aid to Shiite militias was made — Maliki
signed an agreement with Iran to build pipelines between Basra and Iran’s city of Abadan
to transport crude and oil products for their swap arrangements; the agreement was
finalized on November 8, 2007. He also invited Ahmadinejad to Iraq; Ahmadinejad
made the visit, a first since the 1979 Islamic revolution, on March 2-3, 2008. During the
trip, in which he was warmly welcomed at the highest levels of the Iraqi government,
Ahmadinejad said the Iraqi people reject the U.S. presence. In conjunction with the visit,
Iran announced $1 billion in credits for Iranian exports to Iraq, and the two sides signed
seven agreements for cooperation in the areas of insurance, customs treatment, industry,
education, environmental protection, and transportation. Others believe that Iraq’s
cabinet vote not to attend the November 27, 2007, Middle East summit in Annapolis was
out of respect for Iran.
Prospects
Iranian influence in Iraq is currently assessed as extensive, and might increase further
if its ally Sadr prospers politically or, alternatively, momentum builds to create a large
new Shiite autonomous regions in Iraq, as envisioned by ISCI. Any such region would
look to Iran for support. However, some believe Iran’s influence will fade over the long
term as territorial and Arab-Persian differences reemerge and because Iraq’s Najaf might
eventually returning to preeminence over Iran’s Qom as a Shiite theological center. Iraqi
Shiites generally stayed loyal to the Iraqi regime during the 1980-1988 Iran-Iraq war.
Although exchanges of prisoners and remains from the Iran-Iraq war are mostly
completed, Iran has not returned the 153 Iraqi military and civilian aircraft flown to Iran
at the start of the 1991 Gulf War, although it has allowed an Iraqi technical team to assess
the condition of the aircraft (August 2005). Another dispute is Iran’s shelling of border
towns in northern Iraq that Iran says are the sites where the Party for a Free Life in
Kurdistan (PJAK), an Iranian Kurdish separatist group, is staging incursions into Iran.
However, most territorial issues are resolved as a result of an October 2000 bilateral
rededication to recognize the thalweg, or median line of the Shatt al Arab waterway
between them, as their water border. This was a provision of the 1975 Algiers Accords
between the Shah of Iran and the Baathist government of Iraq. (Iraq abrogated that
agreement prior to its September 1980 invasion of Iran.) The water border remains
subject to interpretation, but the two sides agreed to renovate water and land border posts
during the Ahmadinejad visit to Iraq in March 2008.
2 “Clarification Statement” issued by Iraqi Foreign Minister Hoshyar Zebari. May 29, 2006.