A significant diplomatic incident erupted in Iraq on Thursday following the apparent, and subsequently retracted, designation of Lebanon’s Hezbollah and Yemen’s Houthi movement (Ansar Allah) as terrorist organizations by the government in Baghdad. The controversial move, published in the official state gazette by the Justice Ministry on November 17, initially placed the Iran-aligned groups on a sanctions list alongside ISIS and al-Qaeda, sparking immediate confusion and fierce internal criticism.
The decision was met with astonishment, given the Iraqi government’s close ties to numerous powerful political parties and armed factions that are themselves allies of both Hezbollah and the Houthis. Initial interpretations suggested Prime Minister Mohammed Shia al-Sudani might be succumbing to intense pressure from the United States to curb Iranian influence across the region.
However, attention only swelled on Thursday when news outlets reported the listing. Later that day, the Iraqi government issued an official clarification through its state news agency, declaring the inclusion a grave administrative error. The published document was described as an ‘unrevised version’ that should never have been released. Acting on instructions, the Central Bank’s acting deputy governor formally requested the Committee for the Freezing of Terrorists’ Funds to delete the clause containing the groups’ names. Prime Minister al-Sudani announced an investigation to identify and hold accountable those responsible for the blunder.
Analysts were quick to highlight the profound risks such a designation would entail. Iraqi expert Ali al-Mikdam warned that labeling these groups as terrorist organizations ‘carries significant risks and could provoke serious internal tensions with allied factions,’ particularly within the Iran-backed Popular Mobilisation Forces. The controversy raised pressing questions among observers: was this a genuine mistake, or a hasty government backtrack to quell fury from its core allies?
The incident underscores the immense pressure Baghdad faces as it attempts a delicate balancing act. The government strives to maintain positive relations with Washington while honoring its deep commercial, military, and political ties with neighboring Iran. As Israel’s war in Gaza inflames regional tensions, al-Sudani has been praised for largely keeping Iraq out of a wider conflict. Nevertheless, increasing pressure from U.S. officials, including new envoy Mark Savaya, demands a crackdown on Iran-linked armed groups.
The timing is particularly sensitive as al-Sudani seeks a new term following recent elections, a process requiring the crucial consent of Iran-aligned parties. The erroneous listing, therefore, represents a severe political misstep that threatens to undermine his leadership aspirations and reveals the government’s vulnerability to influential internal actors tied to regional powers. As Mikdam concluded, the episode was an ‘inadequately considered’ step that generated political confusion, leaving the administration exposed.