Order Code RS22323
Updated June 16, 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 and attempting to influence, in most cases against the
United States, major Shiite Muslim factions in Iraq, most of which have ideological,
political, and religious ties to Tehran. The Administration asserts that Tehran is
actively directing, training, and arming Shiite militiamen linked, to varying degrees, to
hardline anti-U.S. cleric Moqtada Al Sadr. Some analysts 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 affect the U.S. effort to stabilize Iraq and
heighten U.S. concerns about Iran’s nuclear program and regional ambitions. With the
conventional military and weapons of mass destruction (WMD) threat from Saddam
Hussein removed, Iran’s strategy in Iraq has been to perpetuate domination of Iraq’s
government by pro-Iranian Shiite Islamists, while also aiding Shiite militias that are
willing to combat U.S. forces. Because of their ability to cause U.S. casualties, these
militias give Iran leverage in the event of a broader confrontation with the United States.
However, Iran has increasingly faced a dilemma in Iraq as its protege Shiite leaders have
increasingly fought each other, as happened in Basra and Baghdad in March-May 2008.
During 2003-2005, Iran’s leaders supported the decision by Iraqi Shiite Islamist
factions in Iraq to work with a 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 coincided with U.S. policy, which was to
establish democracy in Iraq. 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 33-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
during Saddam’s rule. Still, the Sadr clan has ideological ties to Iran; Moqtada’s relative,

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Mohammad Baqr Al Sadr, was founder of the Da’wa Party, a political ally of Iran’s
Ayatollah Ruhollah Khomeini, and was hung by Saddam Hussein in 1980. Iran later
came to see political value in Sadr’s faction — which has 29 seats in parliament and a
large and dedicated following, particularly among lower-class Iraqi Shiites. He built a
“Mahdi Army” (Jaysh al-Mahdi, or JAM) after Saddam’s fall, which grew to about
60,000 fighters. 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 those cases, fighting was ended with compromises under which JAM forces
stopped fighting in exchange for amnesty for Sadr. Seeing the JAM as useful against the
United States in the event of a U.S.-Iran confrontation, in 2005, Iran began supplying
arms to the JAM through the “Qods (Jerusalem) Force” of the Revolutionary Guard, the
main Iranian military force. The Qods Force is the unit of the Guard that assists Iranian
protege forces abroad.
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, which is politically aligned with Iran’s hardliners, during the 1980-
88 Iran-Iraq 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, the militia burrowed into the Iraqi
Security Forces (ISF). Badr fighters in and outside the ISF were purportedly 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 cooperate with the U.S. “troop surge” by supporting U.S.
military pressure against Sadr’s JAM militia. Maliki’s alliance with Sadr ended, and
by August 2007 Sadr had pulled his five ministers out of the cabinet and his
parliamentarians out of the UIA bloc. As the rift widened, JAM fighters increasingly
battled Badr-dominated Iraqi government, 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 August 2007 JAM- ISCI clashes in Karbala, and that month Sadr declared
a six month “suspension” of JAM activities. (He extended the ceasefire in February 2008
for another six months.) The intra-Shiite conflict had space to accelerate as Britain drew
down its forces the Basra area from 7,000 to 4,000 in concert with the British withdrawal
from Basra city to the airport, and the transfer of Basra Province to ISF control on
December 16, 2007.

Assertions of Iranian Support to Armed Groups
Iranian material support to militias in Iraq has added to U.S.-Iran tensions over Iran’s
nuclear program and regional ambitions, such as its aid to Lebanese Hezbollah and the
Palestinian organization Hamas, which now controls the Gaza Strip. 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
Mahmoud Ahmadinejad heightened U.S. concerns by saying that Iran would fill a
“vacuum” that would be left by U.S. withdrawal from Iraq. U.S. officials have, over the
past few years, provided specific information on Qods Force and Hezbollah aid to Iraqi

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Shiite militias. No firm information exists on how many Iranian agents might be in Iraq,
but one press report has said there are 150 Qods and intelligence personnel in Iraq.1 Qods
Force officers often do not wear uniforms, and their main role is not combat, but rather
identifying Iraqi trainees and organizing safe passage for weapons shipments into Iraq.
! 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 the second in command and expected
in September 2008 to be overall 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 the Qods Force
in aiding 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 testimony during April 8-9, 2008 — General
Petraeus said that the Qods Force is seeking to turn the “Special Groups”
— purportedly radical and possibly breakaway elements of the JAM —
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.
According to testimony by General David Petraeus (overall U.S. commander in Iraq)
on April 8-9, 2008, Iran continues to arm, train, and direct the Special Groups, who are
attacking U.S. installations in Baghdad. That testimony was delivered just as major
fighting was occurring as Maliki and his allies, perhaps feared Sadrist strength in
provincial elections to be held in the fall of 2008, launched an ISF offensive to clear JAM
and Fadhila militiamen from Basra, particularly the port area which these militias
controlled and used for their own financial benefit. In an operation that Gen. Petraeus
has called “poorly planned,” the ISF — possibly dominated by Badr loyalists — were
initially 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 not to disarm.
Some fighting and JAM rocketing of U.S. installations in Baghdad continued
1 Linzer, Dafna. “Troops Authorized To Kill Iranian Operatives in Iraq,” Washington Post,
January 26, 2007.

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subsequently, in some cases producing deaths of U.S. soldiers, and U.S. forces continued
to fight JAM elements in Sadr City until another Sadr-government agreement in mid-May
2008, while the ISF has taken increasing control in Basra and is preparing a move into
militia-controlled Amarah as of June 16, 2008. In responding to Maliki’s moves, Sadr
has (1) announced on June 13, 2008, that most of the JAM would now orient toward
peaceful activities; (2) that a small corps of “special companies” would be formed from
the JAM to actively combat U.S. forces in Iraq; and (3) in order to circumvent the
government’s demand that the JAM be disbanded as a condition for Sadrist participation
in the provincial elections, the Sadr movement would not offer a separate list for the fall
2008 provincial elections. The movement would instead back technocrats and
independents from other party lists.
Amid increasingly strong statements by U.S. military leaders about Iran’s “malign”
influence in Iraq, General Petraeus said in May 2008 there would be a U.S. briefing on
new information on Iranian aid to the JAM. The briefing has been postponed reportedly
at the request of Iraqi leaders in order not to draw Iraq into a U.S.-Iran dispute. An Iraqi
parliamentary group visited Iran in April 2008 but to no obvious major result on this
issue; an Iraqi commission reportedly is investigating Iran’s aid to the JAM. At the same
time, there has been 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, but that speculation has waned as these battles have quieted.
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, and
another on December 20, but continue to hold 10 who 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

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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.
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 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 because Iran wanted talks to be at the
ambassadorial level, while the United States believed that the working group should meet
first. On May 6, 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 2005, including one led
by interim Prime Minister Ibrahim al-Jafari in July 2005, 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 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.

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After the Maliki government took office on May 20, 2006, Iran’s Foreign Minister
Manuchehr Mottaki visited Iraq, during which Iraq’s Foreign Minister, 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 (Ashraf) near the Iranian border. During Maliki’s visit to Iran during August 8-9,
2007 — during which an 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. In response to a Maliki invitation, Ahmadinejad visited
Iraq, a first since the 1979 Islamic revolution, on March 2-3, 2008. 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. In
conjunction with another Maliki visit to Iran (June 8), Iran’s Supreme Leader Ali
Khamene’i said that a proposed U.S.-Iraq defense pact under negotiation would
perpetuate U.S. interference in Iraq. Additional defense agreements to cooperate on mine
clearance and searches for missing Iran-Iraq war soldiers were signed in the course of the
Maliki visit. In May 2008, Iran also signed an agreement to construct power lines to
increase electricity flow into Iraq.
Prospects
Although Iranian influence is widely assessed as extensive, some believe Iran’s
influence is fading as Iraq asserts its nationhood, and as Arab-Persian differences
reemerge. Iraq’s Najaf might also 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.

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