Order Code RS22323
Updated September 17, 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 influencing major Shiite Muslim factions in Iraq,
most of which have ideological, political, and religious ties to Tehran. The Shiite
faction of paramount concern to the Administration is that of Moqtada Al Sadr,
whose Mahdi Army militia has periodically battled U.S. and Iraqi government forces,
although it is currently relatively quiescent. This report will be updated. See CRS
Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.
Background
Iran’s influence in Iraq has hindered, but not derailed, U.S. efforts to stabilize Iraq,
and has heightened the U.S. threat perception of Iran more generally. With a
conventional military and weapons of mass destruction (WMD) threat from Saddam
Hussein’s regime removed, Iran’s strategy in Iraq has been to perpetuate domination of
Iraq’s government by pro-Iranian Shiite Islamists, while also developing leverage over the
United States by aiding Shiite militias that are willing to combat U.S. forces. However,
Iran itself has increasingly faced difficult choices in Iraq as its protege Shiite leaders,
formerly united, are competing and often even fighting each other.
During 2003-2005, Iran’s encouraged Iraqi Shiite Islamist factions to enter 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 did not conflict with the U.S. objective of establishing democracy. Iran helped
assemble a Shiite Islamist bloc (“United Iraqi Alliance”), encompassing the Islamic
Supreme Council of Iraq (ISCI), the Da’wa (Islamic Call) party, and the faction of the 34-
year-old cleric Moqtada Al Sadr — the bloc won 128 of the 275 seats in the December
15, 2005, election for a full term parliament. Nuri al-Maliki, who was selected as Prime
Minister, is from the Da’wa Party, whose leaders were in exile mostly in Syria. Most
leaders of ISCI spent their years of exile in Iran and its former leader, Ayatollah
Mohammad Baqr Al Hakim (killed in an August 2003 car bomb in Najaf). In 1982, he
was anointed by then Iranian leader Ayatollah Ruhollah Khomeini to head a future
“Islamic republic of Iraq.” ISCI’s militia, the “Badr Brigades” (now renamed the “Badr
Organization”), had been recruited, trained, and armed by Iran’s Revolutionary Guard, the

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most politically powerful component of Iran’s military, during the 1980-88 Iran-Iraq war.
In that war, Badr guerrillas conducted attacks from Iran into southern Iraq against Baath
Party officials, but did not shake the regime. After Saddam’s fall, Iran continued to
provide political, financial, and military support to ISCI and the Badr Brigades militia,
which numbered about 15,000. During 2005-6, with the help of ISCI member Bayan
Jabr as Interior Minister (and close ally of ISCI leader Abd al Aziz al-Hakim, younger
brother of Mohammad Baqr), the militia burrowed into the Iraqi Security Forces (ISF).
The Sadr faction’s ties to Iran were initially limited because his family remained in
Iraq during Saddam’s rule. Still, the Sadr clan has ideological ties to Iran; Moqtada’s
cousin, Mohammad Baqr Al Sadr, was founder of the Da’wa Party, a political ally of
Ayatollah Khomeini, and was hung by Saddam Hussein in 1980. Moqtada is married to
a daughter of Mohammad Baqr Al Sadr. Iran later came to see political value and
potential leverage in Sadr’s faction — which has 30 total seats in parliament, a large and
dedicated following among lower-class Iraqi Shiites, and which built an estimated 60,000
person “Mahdi Army” (Jaysh al-Mahdi, or JAM) militia after Saddam’s fall. Sadr
unleashed the JAM on several occasions as part of a strategy of challenging what he
saw as U.S.-picked Iraqi political leaders, but 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 Revolutionary
Guard’s “Qods (Jerusalem) Force,” the unit that assists Iranian protege forces abroad.
During 2005-6, the height of sectarian conflict in Iraq, Badr fighters in and outside the
ISF, as well as JAM militiamen, were involved in sectarian killings of Sunnis, which
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 as Maliki and its
ISCI partner entered into increasingly close cooperation with the United States as part of
the U.S. “troop surge.” Maliki, who had largely shielded Sadr’s faction from U.S.
operations in 2006, decided to permit U.S. military pressure against the JAM. As a result,
Maliki’s alliance with Sadr ended, and by August 2007 Sadr had pulled his five ministers
out of the cabinet. As the rift widened, JAM fighters battled Badr-dominated Iraqi
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 against Sadr
among Iraqi Shiite civilian victims, particularly after the August 2007 JAM attempt to
take control of religious sites in Karbala. The backlash caused Sadr to declare a six
month “suspension” of JAM activities. (He extended the ceasefire in February 2008 for
another six months.) The intra-Shiite fighting expanded as Britain drew down its forces
the Basra area from 7,000 to 4,000 in concert with a 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
Iran’s arming and training of Shiite 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, to bog down the United States militarily, and to deter

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it from military or diplomatic action against Iran’s nuclear program. 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 the number of Iranian agents in
Iraq, but one press report said there are 150 Qods and intelligence personnel there.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 (Sadrist) militiamen.
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 who in mid-September 2008 will become 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 August 28, 2008,
the Washington Times reported that pro-Sadr militias were now also
using “Improvised Rocket Assisted Munitions” — a “flying bomb”
carrying 100 pounds of explosives, propelled by Iranian-supplied 107
mm rockets.
! On July 2, 2007, Brig. Gen. Kevin Begner said that Lebanese Hezbollah
was assisting the Qods Force in aiding Iraqi Shiite militias, adding that
Iran gives about $3 million per month to these Iraqi militias. He based
the statement on the March 2007 capture of former Sadr aide Qais
Khazali and Lebanese Hezbollah operative Ali Musa Daqduq. They
were allegedly involved in the January 2007 killing of five U.S. forces
in Karbala.
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 “Special Groups” – radical and
possibly breakaway elements of the JAM — and to organize the 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 himself a member of the Qods Force.
The April 2008 testimony was delivered amidst an ISF offensive, launched by Maliki on
March 26, 2008, to clear JAM and Fadhila militiamen from Basra, particularly the port
area which these militias controlled and used for financial benefit. Maliki decided on the
offensive in part to reduce Sadrist strength in provincial elections planned for the fall of
2008 (but now put off until probably early 2009). In the initial assault, the ISF units
(dominated by Badr loyalists) failed to defeat the militias; 1,300 of the 7,000 ISF sent in
for the assault (bringing the ISF force to 30,000 in Basra) did not fight. Later, U.S. and
British forces intervened with air strikes and military advice, helping the ISF gain the
upper hand and restore relative normality. 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
subsequently, in some cases killing U.S. soldiers, and U.S. forces continued to fight JAM
1 Linzer, Dafna. “Troops Authorized To Kill Iranian Operatives in Iraq,” Washington Post,
January 26, 2007.

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elements in Sadr City until another Sadr-government agreement in mid-May 2008.
Subsequently, the ISF moved into Amarah on June 16, 2008, and quieted that city, while
prompting Sadrists protests about ISF arrests of the Amarah governor and other Sadrists.
Other arrests of Sadrists have taken place in Sadr’s former stronghold of Diwaniyah, the
capital of Qadisiyah Province. The weakening of Sadr facilitated the handed over of that
province to Iraqi control in July 2008.
In responding to Maliki’s moves, Sadr told his followers on June 13, 2008 that most
of the JAM would now orient toward “peaceful activities,” clarified on August 8, 2008
to be social and cultural work under a new movement called “Mumahidun,” or “trail
blazers;” (2) that a small corps of “special companies” would be formed from the JAM
to actively combat U.S. (but not Iraqi) 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 back technocrats and independents
for planned provincial elections (late 2008 or early 2009, depending on when the needed
election law is passed) but not offer a separate lists. The number two U.S. commander
in Iraq, Gen. Lloyd Austin, explaining the relative inactivity of the JAM in recent months
in military terms rather than a deliberate decision by Sadr to focus on political
competition, said on August 18, 2008 that U.S. forces were increasingly uncovering arms
caches and other JAM weaponry and that JAM fighters had gone to Iran temporarily for
more training and resupply. The relative quiescence of the JAM could also explain
why a U.S. briefing on new information on Iranian aid to the JAM, first expected in May
2008 but opposed by Iraqi leaders who do not want to draw Iraq into a U.S.-Iran dispute,
has not been held. An Iraqi parliamentary group visited Iran on the issue in April 2008,
and an Iraqi commission 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 the Kurdish city of Irbil.
On November 9, 2007, the U.S. military released nine of them, and another six weeks
later, but continue to hold ten believed of high intelligence value. On August 12, 2008,
U.S.-led forces arrested nine Hezbollah members allegedly involved in funneling arms
into Iraq, and on August 29, 2008, U.S. forces arrested Ali Lami on his return to Iraq for
allegedly being a “senior Special Groups leader.” On March 24, 2007, with U.S.
backing, the U.N. Security Council unanimously adopted Resolution 1747 (on the Iran
nuclear issue), with 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, as of mid-August 2008, by U.S.
and Iraqi forces, replacing the 2,000 forces of Georgia who returned home to deal with
the Russian incursion. In July 2008, U.S. forces and U.S. civilian border security experts,
established bases near the Iran border in Maysan Province, to close off smuggling routes.
In an effort to financially squeeze the Qods Force, on October 21, 2007, the Bush
Administration designated the Qods Force (Executive Order 13224) as a provider of
support to terrorist organizations. 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

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entities are: Ahmad Forouzandeh, Commander of the Qods Force Ramazan
Headquarters, accused of fomenting sectarian violence in Iraq and organizing training in
Iran for Iraqi Shiite militiamen; Abu Mustafa al-Sheibani, the Iran-based leader of
network that funnels Iranian arms to Iraqi Shiite militias; and Isma’il al-Lami (Abu
Dura), a Shiite miltia leader — who has broken from the JAM — alleged to have planned
assassination attempts against Iraqi Sunni politicians. Also on October 21, 2007, the
Administration designated the Revolutionary Guard and several affiliates, under
Executive Order 13382, as of proliferation concern. The designations carry the same
penalties as do designations under Executive Order 13224. Neither the Guard or the Qods
Force was named a Foreign Terrorist Organizations (FTOs), as was recommended by the
FY2008 defense authorization bill (P.L. 110-181) and H.R. 1400 (passed by the House
on September 25, 2007).
Negotiations With Iran. U.S. officials initially rejected the recommendation of
the “Iraq Study Group” (December 2006) to include Iran (and Syria) in multilateral efforts
to stabilize Iraq, in part because of concerns that Iran might use such meetings to discuss
broader U.S.-Iran issues such as Iran’s nuclear program. However, in a shift conducted
in concert with the “troop surge,” the United States attended regional (including Iran and
Syria) 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 discussions at any of these
meetings. In a more pronounced shift, the United States agreed to bilateral meetings with
Iran, 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 lower level working group; it met on
August 6, 2007. In consideration of more recent assessments that Iran was reducing its
weapons shipments into Iraq, talks in Baghdad scheduled for December 18, 2007, were
postponed because Iran wanted them at the ambassador level, not the working group level.
On May 6, 2008, Iran said it would not continue the dialogue because U.S. forces are
causing civilian casualties in Sadr City.
Iranian Influence Over Iraqi Political Leaders
Iran has exercised substantial political and economic influence on the post-Saddam
Iraqi government, although some Iranian initiatives, particularly its commerce with and
investment in Iraq, do not necessarily conflict with U.S. goals. During exchanges of
high-level visits 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. At a related defense exchange, the two signed
agreements on military cooperation, on opening diplomatic facilities in Basra and
Karbala, and on 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 subsequently 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, which was used to
build roads in the Kurdish north and a new airport near Najaf (opened in August 2008),
to help the city host about 20,000 Iranian pilgrims per month who visit the Imam Ali
Shrine there. 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,

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buying about $2 billion worth of goods from Iran during 2007. Iran also has consulates
in the two major Kurdish cities of Irbil and Sulaymaniyah.
After the Maliki government took office on May 20, 2006, Iraq’s Foreign Minister,
Hoshyar Zebari, supported Iran’s right to pursue “peaceful” nuclear technology.2 Maliki
has visited Iran three times: during September 13-14, 2006, signing agreements to on
cross border immigration, intelligence sharing, and commerce; August 8-9, 2007, signing
agreements 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); and June 8, 2008, including the signing of agreements on mine clearance and
searches for missing Iran-Iraq war soldiers. In response to Maliki’s invitation,
Ahmadinejad visited Iraq, a first since the 1979 Islamic revolution, on March 2-3, 2008.
In conjunction, 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 May
2008, Iran agreed to build more power lines into Iraq. Maliki has threatened to expel the
3,400 members of the Iranian opposition People’s Mojahedin Organization of Iran
(PMOI). The group was allied with Saddam against Iran but its members are now
confined by U.S.-led forces to “Camp Ashraf” near the Iran border.
Prospects
Although Iranian influence is extensive, some believe it is fading as Iraq asserts its
nationhood, as the security situation has improved, and as Arab-Persian differences
reemerge. Iraq has not bowed to constant Iranian criticism of a U.S.-Iraq defense pact
that would authorize the U.S. military presence beyond December 31, 2008, and which
is now reportedly nearly completed. Iran says the pact would deprive Iraq of its
sovereignty — criticism that might mask Iran’s purported fears the pact is a U.S. attempt
to consolidate its “hold” over Iraq and to encircle Iran militarily. Iraq’s Najaf is reviving
and might eventually meet pre-war expectations that it would again exceed Iran’s Qom
as the heart of the Shiite theological world. 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 allowed
an Iraqi technical team to assess the aircraft in 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
rededication to recognize the thalweg, or median line of the Shatt al Arab waterway as the
water border (a provision of the 1975 Algiers Accords between the Shah of Iran and the
Baathist government of Iraq, abrogated by Iraq prior to its September 1980 invasion of
Iran.) The water border is subject to interpretation, but the two sides agreed to renovate
water and land border posts during the March 2008 Ahmadinejad visit.
2 “Clarification Statement” issued by Iraqi Foreign Minister Hoshyar Zebari. May 29, 2006.

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