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Iran war spreads to Iraq as parallel conflict escalates

War has laid bare the weakness of the Iraqi state, highlighting risks for the country's investment climate that are likely to last beyond the fighting in Iran.
Iraqi Prime Minister Mohammed Shia al-Sudani visits the headquarters of Iraq's National Intelligence Service on March 22, 2026, after it was attacked. (Photo credit: Prime Minister's Office)

BAGHDAD - As the U.S.-Israel war on Iran enters its second month, a wide variety of Iraqi political and security officials are expressing concern that the spillover conflict in Iraq is now turning into a parallel war that is likely to reshape the country's security dynamics, political balance, and investment climate for years to come.

Paramilitary forces in Iraq have become an active party to Iran's broader war effort, launching dozens of attacks not only on U.S. government and military positions in Iraq but also on a wide variety of targets suspected of being associated with the U.S. and other perceived enemies. The U.S. has reciprocated with multiple airstrikes per day in Iraq against armed groups.

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