Iraq on the Brink: Internal Fractures Amid a Regional War

An unpredictable situation is unfolding in Iraq. While the war with Iran continues, a second conflict is beginning to take shape inside the country. Today, the Iraqi Intelligence Service was attacked by elements of the PMF—something unprecedented. Although Iraqi intelligence and the PMF have long been at odds, they have never escalated to direct confrontation. Instead, both sides have historically worked against each other within their own internal networks and structures.

It has long been believed that Iraqi intelligence, after 2005, was reorganized and reestablished with strong CIA backing. Leadership was later handed to Mustafa al-Kadhimi, to whom many within the service remain loyal. At the same time, sources suggest that Kadhimi still maintains ties with the CIA. This raises the possibility that Iraqi intelligence may be working closely with U.S. agencies to map and expose the full PMF network—providing actionable intelligence to CENTCOM for strikes on their bases, equipment, and leadership.

In this context, the PMF risks evolving into what Hezbollah represents for Israel in Lebanon: a deeply embedded, ideologically driven armed network operating parallel to the state. Washington has repeatedly pressured Iraqi Shia political leaders to disband the PMF, but this has gone nowhere. The reason is clear—many within the Shia political establishment, particularly inside the Coordination Framework, are directly tied to or command PMF factions themselves. Iranian influence only reinforces this reality.

What we are seeing now appears to be a trigger effect. NATO forces have largely left Baghdad, the U.S. Embassy is effectively empty, and the same applies to the U.S. Consulate in Erbil. American personnel tied to the State Department and Department of Defense have been evacuated, and all U.S. citizens have been instructed to leave Iraq, including the Kurdistan Region. The only Americans remaining are tied to military and intelligence operations.

At the same time, PMF behavior suggests a shift in strategy. Over the past two days, there have been no attacks on the Kurdistan Region. This is unlikely to be due to Eid or recent Erbil–Baghdad understandings on oil exports. More likely, it reflects a calculated pause—an attempt by the PMF to go underground, preserve resources, and reassess the situation while anticipating further U.S. escalation.

The U.S., however, has not paused. Strikes on PMF positions have continued—even intensified—during Eid, with reports suggesting possible Israeli involvement in some operations. Meanwhile, key PMF figures such as Qais al-Khazali, leader of Asa’ib Ahl al-Haq, have called for halting attacks on U.S. bases, likely to avoid further devastating responses from CENTCOM, which has already targeted much of Kataib Hezbollah’s infrastructure and leadership in recent days. At the same time, longstanding rumors persist about Khazali’s alleged links to external intelligence services, adding another layer of complexity.

Iraq is now entering a highly volatile phase. The risk of internal conflict between state institutions and PMF factions is no longer theoretical—it is becoming increasingly plausible. Iraqi intelligence may escalate further, either through direct retaliation or by exposing PMF networks to external strikes. This would force Prime Minister Mohammed al-Sudani into an unavoidable position: choosing between state institutions aligned with U.S. support, or powerful armed factions embedded within his own political base.

At the regional level, the stakes are rising even higher. Gulf and European states are now signaling that they are assessing the situation in the Strait of Hormuz and may support U.S. efforts to keep it open by force if necessary. If that happens, Washington may shift more focus toward managing Iraq and Iran directly, while Israel handles Hezbollah and remains on standby for potential escalation from the Houthis.

The trajectory is clear: Iraq is no longer just a secondary theater. It is becoming a central fault line in a wider regional war—one where internal divisions, foreign influence, and strategic recalculations are converging in a deeply unstable and dangerous way.