A new government is expected to be inaugurated in Baghdad at a time marked by sharp volatility on both the national and regional levels. This government will assume its responsibilities at a decisive crossroads, facing a fateful test: either it undertakes broad structural reforms, including meaningfully addressing non-state armed groups embedded within state institutions, or it risks sliding into an escalating confrontation between the United States and armed factions, with potentially violent consequences for the state itself.
There is no doubt that the ongoing tensions between the US and Iran have placed Iraq in a precarious position. Although Iraq is not a direct party to the confrontation, it is far from an insulated bystander; rather, it has become an arena where regional and international rivalries intersect. Moreover, Iraq’s reliance on US security support, alongside deep Iranian influence politically, economically, and militarily, creates a structurally complex environment and represents one of the most prominent challenges facing the new government.
In recent weeks, US bases in Iraq have been subjected to hundreds of attacks by drones and rockets, largely carried out by Iran-aligned armed groups operating under the name “the Islamic Resistance in Iraq.” These operations have caused significant damage to critical military and diplomatic infrastructure in Iraq and underscored the growing operational capabilities of non-state actors within the country. These attacks have not spared the Kurdistan Region of Iraq; on the contrary, the region has been a primary target, subjected to roughly 500 airstrikes during the same period. Notably, more than 60 percent of these strikes were launched by Iran-aligned factions within Iraq’s Popular Mobilization Forces (PMF), while the remainder originated from Iranian territory.
These strikes have inflicted severe damage on energy infrastructure, Peshmerga facilities, and civilian areas in the Kurdistan Region, resulting in at least 25 deaths, including civilians, Peshmerga personnel, and members of Iranian Kurdish opposition groups.
The Kurdistan Region is unable to independently secure its airspace or deploy advanced air defense systems. Effective air protection (provided by the US and European countries) remains largely confined to the boundaries of the city of Erbil, where US military and diplomatic installations are located. Outside this limited area, vital infrastructure across the region remains highly vulnerable to repeated attacks.
For Iran and its allied armed factions, the Kurdistan Region represents an easy and symbolically significant target within Iraq’s fragmented security landscape. These attacks serve multiple purposes: deterring potential cross-border hostile operations, demonstrating the strategic resolve of the Iranian regime, pressuring Baghdad and Erbil to limit US involvement, and reinforcing the role of these factions without sliding into full-scale war.
At the same time, the Iraqi government and the main Shiite actors within the Coordination Framework have not unequivocally condemned these attacks, nor have they taken effective measures to prevent them. This inaction may further inflame internal tensions and is likely to lead to broader political and security repercussions in the near term.
Baghdad’s limited capacity to deal with armed groups reflects a deeper structural reality. Some of these groups are embedded within the state itself, with influence extending across Iraq’s political system, including the legislative, executive, and judicial branches.
This profoundly affects the state’s relationship with armed factions, as well as relations between Baghdad and Erbil and Iraq’s international partnerships. The presence of armed groups operating outside effective state control undermines confidence in Baghdad’s authority and complicates its ability to fulfill constitutional obligations or implement agreements. The result is a cycle of recurring political, security, and economic crises.
The Kurdistan Region has been severely affected by these developments. Continuous attacks have disrupted civilian life and eroded public trust in the state. Economically, attacks on energy infrastructure have constrained production, delayed exports, and discouraged investment. Financial pressures have intensified, complicating governance and service delivery. These challenges are further compounded by internal divisions within the Kurdistan Region’s political and security structures.
At the national level, the consequences appear even more severe. The continued operation of armed groups outside state control undermines institutional legitimacy and entrenches a fragmented security system, increasing the likelihood that Iraq will remain a persistent arena for proxy confrontations. As for US-Iraq relations, ongoing attacks are placing pressure on bilateral security cooperation and risk narrowing the relationship to short-term security concerns at the expense of broader engagement.
More dangerously, the risk of direct confrontation between the US and Iraqi armed actors is rising. Although US responses have so far remained measured, the possibility of escalation into a broader campaign - targeting militia leadership, infrastructure, and drone capabilities - remains significant, regardless of the outcome of US-Iran negotiations. Given the blurred lines between state and non-state military facilities, state security infrastructure could also be targeted. Furthermore, Washington may resort to imposing harsh financial and economic pressure on the country.
Washington is also likely to view the forthcoming Iraqi government as a continuation of the current political system, since the next prime minister will be selected through the same Coordination Framework dominated by Iran-aligned factions linked to the PMF. As a result, the new government may find itself similarly constrained and unable to prevent external strikes, even as it is expected to bear their political and financial consequences. This dynamic reveals a deep fragility in governance and increases the financial burden on Iraq through reconstruction and compensation demands.
At the regional level, the repercussions are no less significant. Drone attacks carried out by factions affiliated with the PMF against neighboring countries, particularly Gulf states, as well as Jordan and Syria, have extended the impact of Iraq’s internal fragmentation beyond its borders, reshaping how the Arab world views Iraq. As long as armed actors retain the ability to use Iraqi territory for coercion, retaliation, or sending messages, Baghdad will struggle to present itself as a sovereign and reliable partner. Failure to address this challenge risks deepening tensions not only with the United States but also with its neighbors, leading to declining political support, eroding trust, and a gradual form of Arab disengagement. Restoring confidence, therefore, requires more than internal stability; it demands a genuine commitment to preventing the use of Iraqi territory in ways that undermine regional security.
Looking ahead, Iraq faces a mix of risks, including escalation, institutional erosion, and economic stagnation. Progress will depend on gradually de-escalating tensions and implementing incremental institutional reforms, particularly in making command-and-control structures clearer. However, given the entrenched position of non-state actors with transnational ties, meaningful reform will be complex and arduous, if achievable at all.
The Iraqi federal government must adopt a dual-track approach: gradually strengthening control over armed groups through political agreements while maintaining strong and credible leverage. As for international partners, despite growing frustration, they retain the capacity to exert influence through conditional engagement and targeted support. Without tangible reforms, Iraq’s political and security dynamics may veer toward large-scale confrontation and institutional disorder.
