Why Did Iraq’s Militias Sit Out the Iran–Israel War and Why it Matters

Defying expectations, Iran-backed Iraqi militia groups refrained from carrying out attacks on US military facilities inside Iraq after Israel’s 13 June strikes on Iran. Yet, in the weeks following the war, a series of militia drone and rocket attacks targeted vital infrastructure and oil facilities in central and northern Iraq. Why did Iraq’s Iran-aligned paramilitary groups abstain from joining Tehran’s counter-attack on US military bases, despite earlier pledges to retaliate if Washington intervened during the Israel–Iran war, and yet unleashed violence across the country only a month later?

We argue that Iran-backed Iraqi militias chose to remain uninvolved in the Iran–Israel war because their aims are more strategic: to simultaneously redefine Iranian influence within the Iraqi state and maximise their own interests. Escalating against US or Israeli targets would have risked derailing this trajectory, diverting resources, and inviting disproportionate reprisals, including targeted leadership decapitation. Rather than becoming embroiled in open conflict, Iran-linked paramilitary factions in Iraq are intensifying their focus on contesting the upcoming parliamentary elections scheduled for November 2025. However, this restraint does not signal a rejection of violence, but rather its selective deployment – reserving violence for consolidating domestic authority, while avoiding actions that could trigger costly external retaliation.

We premise our argument on three intersecting explanations for the decision by armed groups and parties linked to the Popular Mobilization Forces, or al-Hashd al-Sha’abi – a state-backed paramilitary umbrella comprising over 200,000 recruits – against targeting US-led coalition assets and personnel in Iraq in June. These relate to intra-group assessments (such as fears over a leadership decapitation scenario like the campaign against Hezbollah and Hamas); calls for restraint from the central government of Iraqi Prime Minister Mohammed Shia’ al-Sudani; and discouragement from Iran. To support our argument, we draw on discrete interviews with a number of informed interlocutors linked with the Iraqi government and Iran-backed paramilitary networks.

Despite exercising strategic restraint during the Israel--Iran conflict, Hashd factions have been accused of conducting domestic attacks in recent weeks. Following the cessation of the Israel–Iran war and the establishment of a temporary ceasefire, Iran-backed paramilitary groups moved quickly to reassert leverage through a wave of lethal, though unclaimed, attacks, most notably on oil facilities and military bases in the Kurdistan Region of Iraq, starting on 2 July and ending on 28 July, which temporarily halted nearly half of the region’s production. One day before the strikes, a senior aide to Iran’s Supreme Leader warned against a potential threat posed by US forces in northern Iraq against Iran. The strikes that followed the Iranian statement coincided with fraught Baghdad–Erbil negotiations over oil exports, unsettling the talks but ultimately not preventing an agreement. Meanwhile, in Baghdad, Kata’ib Hezbollah (KH), one of Tehran’s most influential local allies, led an armed assault on the Agriculture Directorate on 27 July over a dispute with rival militia Kata’ib al-Imam Ali, underscoring intensifying intra-paramilitary competition ahead of elections.

While Iran’s role in orchestrating these incidents remains unconfirmed, assessing the likelihood and scale of Tehran’s involvement is critical, as it would underscore the persistence of Iranian influence within Iraq’s internal security and political dynamics.

When a sitting Iraqi prime minister dares to confront KH, the stakes are never low: in an unusually bold move, Sudani ordered on 9 August the removal of two commanders leading the KH-linked Hashd brigades, breaking a longstanding pattern of political caution. While the restraint shown by paramilitary groups was a welcome development, recent developments show that Iraq’s security cannot rely on just the unreliable self-restraint of militia . The focus must shift toward strengthening the state’s coercive capacity to prevent any autonomous action by armed actors, while conceding that they have gained probably irreversible political capital over years of state capture and engagement with electoral politics.

Should the controversial Hashd restructuring law – which Sudani backs and the US opposes – pass in Iraq’s parliament, legally entrenching the organisation, reforms should be encouraged to keep rogue actors from being empowered further. The only realistic path forward still lies between the extremes of calling for the full dismantlement of the Hashd and pursuing a policy of appeasement.

To support our argument on militia restraint and its aftermath, we draw on ongoing and discrete conversations with a variety of informed interlocutors in the Iraqi government and Iran-backed paramilitary networks, and we follow this with policy prescriptions drawing on Sudani’s 9 August move against KH.

Fear of Leadership Decapitation 

Central to understanding the current rationale guiding Iraq’s Shi’ite militant networks is the impact of Israel’s escalating strategy to degrade the military capabilities and dismantle the command infrastructure of Iran’s Axis of Resistance. There is credible reason to believe that the leaders of Iraq’s paramilitary factions went into hiding following Israel’s strikes on Iranian military and nuclear sites. Informed sources suggest that Hadi al-Ameri may have been in Najaf, while others reportedly sought refuge in Qom. A similar pattern emerged after the US assassination of Islamic Revolutionary Guard Corps (IRGC) commander Qassem Soleimani and the Hashd’s de facto leader Abu Mahdi al-Muhandis in January 2020, when several paramilitary leaders fled to Iran as a precaution. The threat to group commanders is both credible and immediate. In January and February 2024, the US killed two mid-level commanders from Harakat al-Nujaba and Kata’ib Hezbollah in Baghdad in successive strikes. These actions were followed by Israel’s assassination of Hezbollah’s long-time leader Hassan Nasrallah in an Israeli airstrike in September 2024, and the killing of veteran Hamas commander Yahya Sinwar during a high-intensity shootout with Israeli forces in Rafah on 16 October 2024.

Iran-backed paramilitary factions linked to the Iraqi state (such as Kata’ib Hezbollah, Kata’ib Sayyid al-Shuhada, and Asa’ib Ahl al-Haq) have morphed into quasi-bureaucratised entities linked to the Iraqi state, which they simultaneously seek to challenge, co-opt and re-imagine through their presence in the Hashd, other security agencies and various civil ministries. This institutional transformation has been underway for some time. While historically, the Badr Organization and the Sadrist Movement, for example, were the key armed groups engaged in electoral politics, Iraq saw a boom in armed groups’ electioneering in the 2018 elections, following the territorial defeat of the Islamic State group in Iraq in 2017. In the 2021 elections, groups such as Asa'ib Ahl al-Haq, Kata’ib Hezbollah, and Kata’ib Sayyid al-Shuhada came to play even a more powerful role in Iraq’s politics.

For example, Kata’ib Hezbollah, Iran’s most potent proxy and a US-designated Foreign Terrorist Organization since 2009, ran in the October 2021 elections through a political network, Harakat Hoquq. The group won six seats in Iraq’s parliament and began gravitating over time to Sudani, in a bid to expand its lobbying to the Prime Minister’s Office. In April 2025, Kata’ib Hezbollah’s political front reportedly engaged in talks to run for the November 2025 elections in alliance with Sudani. At the same time, it has been working to neutralise the attempts of the rivalling Asa’ib Ahl al-Haq, which the US designated a Foreign Terrorist Organization in 2020. The emergence of the Kata’ib-linked electoral bloc was reflective of the group’s transforming approach to the game of electoral politics, emerging from the shadows and shifting from a mere anti-US elite militant force to an active policymaking actor within the Iraqi state apparatus. This discernible shift goes a long way in explaining the exercise of restraint in the recent war and avoiding the risk of leadership decapitation.

Baghdad’s Restraint Strategy

To avoid dragging Iraq into the 13 June war, Sudani reportedly engaged with armed group commanders linked with the Hashd in a meeting on 14 June to dissuade them from joining the war. Publicly, Sudani’s government expressed solidarity with the Islamic Republic against the Israeli offensive. This strategy has seen relative success because the government has extended bargains to empower the Hashd economically in exchange for militia restraint since late 2022, when Sudani took office. Since then, militia attacks on US military assets saw a significant decline compared to their 2020–21 levels; this only reversed after 7 October 2023, when paramilitaries launched attacks on Israel, before waning in November 2024.

Considering that President Donald Trump’s policy of ‘maximum pressure’ on Iran has increasingly extended to the Hashd, Sudani’s efforts, since taking office in October 2022, included assurances to halt attacks on US interests. Reflecting a transactional approach to balance the demands of Iraq’s armed groups, Sudani approved the establishment of Al-Muhandis General Company in December 2022, the engineering arm of the Hashd. As early as 2019, a senior Badr Organization commander had told the authors in Baghdad that the Hashd sought to establish an economic arm like the Egyptian military’s highly lucrative engineering authority. Today, Al-Muhandis is believed to hire an expansive network of contractors linked with paramilitary actors, Iran, and even China to deliver infrastructure and development projects across Iraq.

Still, US pressure has had an impact on Hashd financial flexibility, US pressure has constrained Hashd’s financial resources, a factor that likely shapes its calculus in weighing the costs and benefits of violent action versus strategic restraint. For example, Hashd salary payments have been delayed in recent months. Hashd leaders attributed the delay in June salary payments to a ‘technical issue’, while media reports pointed to US pressure on Qi Card – the payment platform distributing PMF salaries – to halt its dealings with the group. Militia affiliates first received Qi Cards in April 2019. According to informed sources in Baghdad, the PMF’s contract with Qi Card expired in 2019, and rather than renewing it, the commission opted to engage Al-Nahrain Islamic Bank as the new contractor. By selecting a provider with lower commission fees, PMF financial networks can retain a larger margin – redirected as kickbacks – which would fuel the electoral machinery of PMF-linked parties ahead of the November elections. Still, it cannot be ruled out that Qi Card was subjected to informal US threats of sanctions if it continued its engagement with the PMF.

In the meantime, the budget for Iraq’s security sector and the Hashd continues to surge. Between 2017 and 2024, the Hashd underwent a substantial budgetary expansion, doubling from $1.63 billion in 2017 to $3.4 billion in 2024. The Hashd is believed to already have tens of thousands of ‘ghost soldiers’ whose excess salaries, according to multiple well-informed Iraqi sources we spoke with, are channelled to Iran via paramilitary structures. Nevertheless, the Iraqi government has been increasing scrutiny and oversight over the financial levers of the Hashd, but with mixed results.

As US–Israeli pressure on Iran intensifies, Iraqi paramilitary groups – facing potential losses in funding, influence and access – are as determined as ever to contest the 2025 elections, and will probably field more candidates than in 2021, to safeguard their stake in the state. Paradoxically, the deeper groups like Kata’ib Hezbollah embed themselves within state structures, the more they expose themselves – biometrically, politically and financially – to external scrutiny and potential US Treasury sanctions.

Iran’s Discouragement 

Iran has strategic imperatives to counter any threats to its entrenchment in Iraq. Iran-backed paramilitary groups in Iraq serve as a lifeline for Iran’s heavily sanctioned economy, enabling sanctions evasion and tactics to circumvent obstacles to Iran’s access to US dollar currency. Since 2022, Washington has been increasingly scrutinising dollar and credit card transactions conducted by individuals and Iraqi financial institutions, particularly private banks, many of which are enmeshed with the paramilitary networks and their political extensions. The most recent punitive measure involved the blocking of Iran-linked financial networks in Iraq from using Visa and Mastercard, which have been reportedly used to engage in extensive fraudulent schemes. However, as long as demand for US dollars remains elevated, new loopholes will almost inevitably emerge – and be swiftly exploited.

According to a well-placed Iraqi source, in the lead up to strikes on Iran’s nuclear sites, there was a credible military threat assessment in Baghdad that Israel might launch preemptive strikes on Iraqi territory, including the strategic Basra port in southern Iraq. This would mirror Israel’s pattern of targeting Hezbollah and Houthi-held infrastructure in Yemen. This included the Hodeidah port, first struck in July 2024, a day after a deadly drone attack on Tel Aviv. As early as October 2024, it was reported that Israel had identified 38 targets in Iraq and that Israel would retaliate against the militias in case of an attack. Basra serves as a logistical hub for Iranian-linked commercial networks and supply lines vital to Iran’s economic and strategic interests in the region. The threat to its supply chain and economic reach probably led Iranian officials to urge Iraqi paramilitary groups to exercise restraint and avoid direct involvement. According to two Iraqi political sources, Tehran issued these directives both before and during the 13 June conflict, with one source confirming that militia leaders were summoned to a meeting in Iran to receive explicit instructions not to intervene.

The current strategy of the Hashd reflects a deliberate project of growing incremental state capture in return for restraint and disengagement from the current regional war. Yet as these militias deepen their entrenchment within the Iraqi state, their ability to maintain a distinctly pro-Iranian ideological identity and shape the state’s trajectory will depend on how effectively they adapt to a scenario in which Tehran’s patronage is severely curtailed or eliminated by sustained US–Israeli pressure.

An Opportunity for Security Sector Reform

To support stability in Iraq and maintain the momentum of Sudani’s recent law-enforcing decisions against KH, Western security sector assistance (through the European Union Advisory Mission and NATO Mission in Iraq, and backed by the US and the UK) should focus on centralising and reinforcing the Iraqi state’s coercive capacity to limit armed group autonomous action through a unified agenda and timeframe. A multi-pronged strategy should aim to rebalance the Hashd within Iraq’s security architecture. A reform package could include policies like removing pro-Hashd elements from sensitive state agencies such as the National Security Service and the Iraqi National Intelligence Service, redistributing security responsibilities between the Hashd and other state forces, providing Western training to state-compliant Hashd brigades, introducing measures to improve transparency in salary payments, and conducting independent audits to assess the Hashd’s budget.

Attempting to dismantle the Hashd wholesale without a workable security sector reform plan could backfire and destabilise the country by emboldening pro-Iran groups who are less risk averse. Reforms should differentiate between factions and accommodate those less directly linked to Iran and more prone to ‘Iraq-ification’. The reforms would particularly target those factions that engaged in counterterrorism operations against Islamic State in 2014–17 and have since abided, for the most part, by state laws. As informed sources within the Iraqi government stress, ‘any serious effort to address the Hashd’s influence must be rooted in broad domestic political consensus’, meaning that change cannot be externally imposed. Crucially, religious authorities in Najaf would need to play an active role in securing public and political buy-in.

Much will depend on how Iraqi paramilitary groups reposition themselves in relation to Iran since the June war. If the IRGC becomes absorbed in consolidating and restructuring its command and control, possibly deprioritising Iraq, major factions such as Asa’ib Ahl al-Haq, traditionally aligned with Iran but guided by pragmatic instincts, may shift toward a more Iraq-centric posture. This realignment could drive greater centralisation of authority in Baghdad and trigger a broader recalibration among Iran-linked groups, shaped by their threat perceptions, access to state resources, and ideological ties to the Axis of Resistance.

The Islamic Republic wants to project an image of resilience to its proxies and allies before extending that posture to its adversaries. In the aftermath of US strikes against its nuclear facilities, Tehran has sent a clear message across what remains of its proxy network: ‘We were attacked by the world’s greatest military and have survived to fight another day.’ Iraqi Shia groups are listening. According to a well-placed source in Najaf who spoke to us on the condition of anonymity, ‘Today, in Iraq we are facing a pro-Iranian McCarthyism: you are either with Iran, or you an agent of Israel. The pro-Iranian agenda is pervasive, and the Hashd’s bloated billion-dollar budget is being spent to flood any patriotic Iraqi national sentiment.’ The Hashd will likely maneuver to leverage this momentum in the November 2025 elections, perhaps capitalising on the ‘rally around the flag’ moment in Tehran or adopting a narrative of a region-wide threat to Shi’ite Muslims, from Lebanon to Iran.

Conversely, with Iran weakened militarily and its force projection handicapped, there may be an opening now for groups like Asa’ib Ahl al-Haq to prioritise their own interests – for instance, to survive a region-wide decapitation campaign and safeguard their expansive economic and military interests – rather than bolster Iran’s. This may mean a greater willingness to make some concessions and incrementally abide by the rule of law.

The active electoral preparations of paramilitary-linked parties ahead of the November 2025 elections, alongside their restraint during the Israel–Iran war, point to a strategic pivot toward institutional entrenchment driven by self-preservation. Whether this shift advances Iraq’s democratic process or deepens the integration of coercive actors into the state hinges on the next prime minister’s resolve to pursue meaningful security sector reform and forge the necessary political consensus.

© RUSI, 2025.

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