Iraqi Government Seeks to Keep Country Out of Iran War Fallouthttps://english.aawsat.com/arab-world/5246933-iraqi-government-seeks-keep-country-out-iran-war-fallout
Iraqi Government Seeks to Keep Country Out of Iran War Fallout
Al-Sudani chairs a meeting of the National Security Council (Prime Minister’s Office Media).
The government of outgoing Prime Minister Mohammed Shia Al-Sudani is working to distance Iraq from the escalating US-Israel war on Iran.
Tehran has responded to the military operation launched by the US and Israel with missile strikes on Gulf states and other locations, including Iraq, saying it is targeting American bases and interests.
Although Iraq has not been directly drawn into the conflict - unlike during the Iran-Iraq War (1980–1988), the 1990–1991 Gulf War, or the 2003 US-led invasion that toppled Saddam Hussein - fear is mounting as the country risks being caught between Iran and its local allies and the broader confrontation involving Washington and Tel Aviv.
There are also concerns that any disruption to Gulf shipping lanes could significantly curtail Iraq’s oil revenues.
Al-Sudani, who also serves as commander in chief of the armed forces, chaired on Monday an emergency meeting of the Ministerial Council for National Security, according to a statement from his office.
The premier instructed security agencies to prevent any actions that could undermine stability and to ensure that Iraq is not dragged into the conflict. Still, some observers say the government has been unable to stop missile attacks on Iraqi territory.
The government reiterated its commitment to protecting diplomatic missions and critical infrastructure, while affirming that freedom of expression and peaceful assembly remain constitutionally protected rights.
The statement stressed that security forces will continue safeguarding citizens, diplomatic facilities and public and private property, in line with national laws and international obligations.
The remarks appeared to reference attempts Sunday evening by groups linked to Iran-aligned armed factions to approach the US Embassy in Baghdad’s fortified Green Zone. Security forces stopped them from reaching the compound.
The council added that Iraq remains committed to preventing escalation and ensuring its territory is not used for external or internal conflicts, underscoring that decisions on national security and military action lie solely with the state and its constitutional institutions.
The council also reviewed the potential economic fallout of a prolonged and expanding conflict, particularly the risks associated with a possible closure of the Strait of Hormuz. The bulk of Iraq’s oil exports pass through the Gulf en route to the strategic waterway.
Given the country’s heavy dependence on oil income, any sustained disruption to maritime traffic would pose a serious threat to Iraq’s already fragile economy.
Egyptian Source to Asharq Al-Awsat: Cairo Hosts Egyptian-Israeli Talks to Avert Renewed Gaza War
Palestinians inspect the site of an Israeli strike on a vehicle in Gaza City, July 9, 2026. (Reuters)
An Egyptian source familiar with the Gaza ceasefire negotiations told Asharq Al-Awsat that Egyptian and Israeli delegations met in Cairo in recent hours as part of intensive efforts to prevent complications that could jeopardize the ceasefire in the Gaza Strip.
On Thursday evening, Israel’s public broadcaster reported that a delegation of senior Israeli military officers had arrived in Cairo and held talks over the previous two days with senior Egyptian military officials on advancing to the second phase of the Gaza ceasefire agreement.
The meeting coincided with the presence in Cairo of a Hamas delegation led by Khalil al-Hayya, which is holding talks with mediators on preserving the Gaza agreement signed in October.
The Egyptian source said a US delegation is expected to arrive in Cairo for consultations on Gaza and continued talks with Hamas in an effort to salvage mediation. The source added that there are growing indications Israeli Prime Minister Benjamin Netanyahu may resume the war for electoral gain.
According to the source, the Cairo talks focused on proposals presented last week that Hamas had rejected. The Israeli delegation conveyed a message it had delivered to Nickolay Mladenov, the High Representative for the Board of Peace, warning that if current efforts based on revised draft proposals fail, Israel will move ahead with military operations inside Gaza.
Over the past three months, Mladenov has put forward proposals centered on disarming Gaza as a prerequisite for reconstruction. Hamas has objected, insisting that the remaining commitments of the agreement’s first phase, particularly an Israeli withdrawal, be implemented first.
Displaced Palestinian children refill water containers in Deir al-Balah, central Gaza Strip, Saturday July 4, 2026. (AP)
The source said the Israeli delegation reiterated that Hamas must comply with the agreement, foremost by accepting the proposed disarmament formula.
Mediators are consulting Hamas on accepting a clear and direct text to be conveyed to Mladenov to move the process forward and avert renewed Israeli military action.
The source also warned of mounting indications that Netanyahu could opt for military escalation ahead of elections expected in the coming months, citing opinion polls showing stronger support for rivals including Gadi Eisenkot and Naftali Bennett.
The source added that Mladenov has refused to amend the current proposals and continues to insist that Hamas engage with them seriously.
According to the source, the Israeli delegation expressed its willingness to cooperate with Egypt’s “responsible efforts,” while warning that Hamas’s intransigence would inevitably lead to renewed confrontation.
The source said Egypt’s decision to host the Israeli delegation despite regional tensions reflects Cairo’s openness to all parties and its determination to bridge differences.
Egypt is engaging all sides, the source added, because of the worsening humanitarian situation and fears that renewed fighting would lead to further targeted killings of field commanders and a broader deterioration on the ground.
A US delegation may soon arrive in Cairo for further consultations.
Egypt is coordinating closely with Türkiye and Qatar to maximize pressure on the Israeli government, according to the source. Cairo also plans contacts with Washington aimed at ensuring US adherence to the existing peace framework and preventing alternative tracks or new proposals from Mladenov that could further complicate negotiations.
The source did not rule out Hamas continuing to play for time while monitoring US-Iran developments and awaiting the outcome of its internal elections, potentially delaying major decisions and leaving negotiations in limbo.
Even so, the source said Egypt is racing against time to prevent renewed Israeli military action as Israeli elections and the US midterm elections approach, warning that both could derail diplomatic efforts.
A traditional market in Egypt’s Giza Governorate. (Asharq Al-Awsat)
The renewed US-Iran conflict in the Middle East is expected to further curb Egypt’s economic growth prospects as global oil prices are forecast to rise again, while several sectors of the economy continue to grapple with the effects of months of conflict, analysts say.
In its latest World Economic Outlook report released days ago, the International Monetary Fund (IMF) lowered its forecast for Egypt’s economic growth in fiscal year 2026-27 to 4.4 percent, down from the 4.8 percent projected in April. The IMF cited “the continuing impact of the Iran conflict — particularly the closure of the Strait of Hormuz — on the Middle East, weaker investment, higher financing costs, and persistent uncertainty.”
Economist Wael El-Nahas said the downgrade is “not limited to Egypt but reflects the global economy as a whole in light of the conflict’s repercussions,” describing the revision as both natural and expected.
Speaking to Asharq Al-Awsat, El-Nahas noted that the current period of skirmishes between the two sides could be viewed as a period of tacit understandings, allowing oil supplies to keep flowing while limiting sharp increases in food prices and other commodities. However, he warned that a renewed conflict would bring “a much worse period.”
Financial markets researcher Mohamed Mahdy Abdulnabi told Asharq Al-Awsat that geopolitical tensions are the main driver behind the weaker growth outlook.
He said Egypt faces several challenges under the current circumstances, including higher borrowing costs, greater reluctance among lenders to extend new financing, declining foreign investment, stagnation in the private sector, and continued losses at the Suez Canal.
President Abdel Fattah al-Sisi has previously estimated the canal’s losses at $10 billion, citing regional tensions and their impact on Red Sea shipping.
Abdulnabi warned that if the conflict persists, pressure on Egypt’s economy will intensify. “When global oil prices fell below $70 a barrel, the Egyptian government did not cut domestic fuel prices. But as soon as prices began rising again, discussion resumed over the automatic fuel pricing mechanism and the need to increase fuel prices,” he remarked.
The government raised fuel prices by between 14 and 30 percent last March, just 10 days after the US-Iran conflict erupted, amid rising energy import costs.
El-Nahas warned that global oil prices could climb above $100 a barrel, noting that Egypt’s current state budget is based on an assumed oil price of about $75 a barrel. Any increase, he said, would raise the country’s energy import bill and widen the budget deficit. He also cautioned that it could trigger another round of fuel price hikes, further worsening the cost-of-living crisis.
Egypt’s annual inflation rate stood at 14.3 percent in June, down slightly from 14.6 percent in May.
Despite the risks, El-Nahas stressed that some sectors, particularly tourism, still have strong growth prospects despite the renewed US-Iran conflict.
Iraqi Judiciary Opens Door to 'Conditional Settlements' to Recover Corruption Fundshttps://english.aawsat.com/arab-world/5294711-iraqi-judiciary-opens-door-conditional-settlements-recover-corruption-funds
Iraqi Judiciary Opens Door to 'Conditional Settlements' to Recover Corruption Funds
Iraqi Prime Minister Ali al-Zaidi receives Supreme Judicial Council President Faiq Zaidan in Baghdad. (Government press office)
Iraq’s Supreme Judicial Council announced Friday that it is coordinating with the government on legal mechanisms aimed at combining accountability for corruption with the recovery of public funds.
The proposal could allow reduced legal measures or lighter sentences for defendants who voluntarily return embezzled money under amendments to the General Amnesty Law.
Meanwhile, the recent security operation, dubbed Dawn Assault, has exposed divisions within the ruling Coordination Framework, according to political sources and public statements.
In a statement, the council said its objective is to both hold perpetrators of financial and administrative corruption accountable and recover state funds, adding that these goals could be achieved by easing legal procedures or reducing sentences “within constitutional and legal limits.”
The council noted that the approach was first adopted in the Tax Deposits case, widely known as the “Heist of the Century.” The case centers on the fraudulent withdrawal of tax deposits lodged by foreign companies with the General Commission for Taxes as guarantees for project implementation.
The funds were allegedly siphoned off through irregular procedures involving brokerage firms, including Al-Qant and Al-Mubdeoon Oil Services Company, owned by businessman Noor Zuhair, with the help of government employees.
According to the council, the head of the Supreme Judicial Council and then-Prime Minister Mohammed Shia al-Sudani agreed, with the approval of the investigating judge, to release Zuhair on bail in exchange for repaying the money in installments and receiving a reduced sentence.
The arrangement led to the recovery of 365 billion Iraqi dinars (about $252 million) out of 1.618 trillion dinars (about $1.12 billion) owed by the two companies. Overall, about 3.831 trillion dinars (roughly $2.64 billion) were withdrawn from Rafidain Bank through multiple companies.
According to the council, Zuhair later left Iraq, bringing repayments to a halt. He was subsequently tried in absentia, sentenced to 10 years in prison, and became the subject of extradition proceedings through Arab and international police channels.
Following amendments to the General Amnesty Law, Zuhair’s lawyer requested that his client be covered by the legislation in exchange for repaying the remaining funds. The court sought the Finance Ministry’s opinion, as the injured party, on the proposed repayment mechanism but has yet to receive a response, leaving the request pending.
The council added that 12 employees of the General Commission for Taxes have been sentenced to prison for facilitating the withdrawals and may qualify under the amended amnesty law after paying compensation determined by the Finance Ministry.
An photo released by the Iraqi judiciary shows cash seized inside boxes and bags marked with the Iraqi Central Bank's seal.
It also noted that an investigation into former Prime Minister Mustafa al-Kadhimi, whose government was in office when the crime occurred, was closed for lack of evidence.
The same approach could also be applied in the North Refineries Company case involving detained suspect Adnan al-Jumaili and several current and former lawmakers, provided the alleged offenses predated the amended amnesty law and the outstanding funds are repaid.
Crimes committed after the law took effect are not eligible for amnesty.
The judiciary is now coordinating with Prime Minister Ali al-Zaidi on a constitutional and legal “roadmap” aimed at recovering public funds while easing legal measures against those who voluntarily return them.
Separately, the June 28 Dawn Assault operation inside Baghdad’s Green Zone, which resulted in the arrest of dozens of corruption suspects, triggered criticism within the Coordination Framework.
An informed source told Asharq Al-Awsat that several alliance leaders were caught off guard by the operation and the deployment of tanks and armored vehicles, raising concerns that military force could be used more broadly in the future.
The source added that al-Zaidi defended the measures during his first meeting with Coordination Framework leaders after the operation, arguing that the armored deployment was necessary to seal off the Green Zone while the arrests were carried out.
The source also said several lawmakers managed to leave the Green Zone minutes before the operation began, some of them affiliated with armed factions.
The absence of any response from those groups during the operation further heightened concerns among some Coordination Framework leaders.
Legal expert Jamal al-Asadi told Asharq Al-Awsat that Iraqi law has no provision allowing financial settlements in corruption cases or other criminal offenses.
He noted, however, that the amended General Amnesty Law includes specific provisions covering those convicted of embezzlement or squandering public funds, subject to prescribed legal conditions.
In televised remarks, leading member of the Coordination Framework Amer al-Fayez said all alliance leaders except former PM al-Sudani criticized the government for failing to notify them in advance of the operation.
While backing efforts to pursue corruption suspects, he objected to the use of tanks during the arrests, arguing that although the prime minister was under no obligation to disclose operational details, the Coordination Framework, as “the state’s highest governing authority,” should have been informed.
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