Iran and Iraq - Part 3 Rise of Popular Forces in Iraq

Handing the Israeli embassy in Tehran over to the Palestine Liberation Organization in February 1979 infused fresh energy into the Palestinian Movement.

Iran and Iraq - Part 3 Rise of Popular Forces in Iraq
Iraq, suffering from sanctions from outside and dictatorship from within, was in a desperate situation in the 1990s. Dissent at home was growing and an implosion was imminent. It was during those days when the popular forces were emerging.

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Following the 1979 Iranian Revolution, Iran ended its diplomatic relations with Israel and handed the Israeli embassy in Tehran over to the Palestine Liberation Organization (PLO), which then established it as the Palestinian embassy. This was a symbolic gesture that signified Iran's shift from being an ally of Israel under the Shah to becoming a staunch supporter of the Palestinian cause under the new Islamic Republic.

Key details of the event
Symbolic handover: A few days after the revolution's victory in February 1979, the new government welcomed a Palestinian delegation led by PLO chief Yasser Arafat. In a highly symbolic moment, Iranian officials handed Arafat the keys to the former Israeli embassy building.

Establishment of the Palestinian Embassy: On February 19, 1979, Arafat officially installed the "Embassy of Palestine" sign on the building, opening the first-ever Palestinian embassy. The former Israeli ambassador and staff had already fled the country.

Location renamed: The street and square where the embassy is located, previously named Kakh (Palace) Street and Kakh Square, were renamed
Palestine Street and Palestine Square.
Policy shift: This event marked a dramatic reversal of foreign policy. Under the Shah, Iran and Israel maintained close ties, viewing each other as non-Arab allies against common regional threats. The new Islamic Republic, led by Ayatollah Ruhollah Khomeini, declared Israel an enemy, referring to it as the "Little Satan".

Ongoing relations: Since 1979, Iran has never recognized Israel and has remained a major financial and military backer of Palestinian groups, although relations with the PLO leadership became complicated in later years.

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In the 1990s, comprehensive international sanctions imposed on Iraq during Saddam Hussein's dictatorship had devastating consequences for the Iraqi population. Following the 2003 invasion and Hussein's ouster, the country transitioned away from dictatorship, but continues to face external pressures and internal instability.

Sanctions during Hussein's dictatorship
After Iraq's 1990 invasion of Kuwait, the United Nations Security Council (UNSC) imposed a comprehensive embargo under Resolution 661.
Initial goal: The sanctions aimed to compel Iraq's withdrawal from Kuwait, force payment of reparations, and dismantle its weapons of mass destruction (WMD) programs.

Humanitarian crisis: The comprehensive nature of the embargo blocked most trade, crippling Iraq's economy. This led to severe hardships for the civilian population, including a dramatic increase in child mortality rates and widespread malnutrition due to shortages of food, medicine, and clean water.

Oil-for-Food Programme: Introduced in 1996 to address the humanitarian crisis, the program allowed Iraq to sell a limited amount of oil in exchange for food and other supplies. However, the program was mired in corruption and manipulation by Hussein's regime, and sanctions remained in place until after the 2003 invasion.

End of regime-era sanctions: The comprehensive sanctions were largely lifted by the UNSC in May 2003, with specific measures remaining in place until 2011 to handle reparations and other issues.
Post-Hussein era: Sanctions and foreign influence

While the original comprehensive sanctions were lifted, modern, targeted sanctions continue to be a factor in Iraq, reflecting ongoing foreign influence and internal security issues.

Targeted U.S. sanctions: In October 2025, the U.S. imposed new sanctions on Iraqi officials, businessmen, and companies connected to Iran-backed militia groups (IAMGs).

Countering Iranian influence: These sanctions are intended to disrupt illicit funding for Iran's activities and safeguard Iraqi resources, which Washington alleges are being exploited for graft and corruption.
Political impact: The move was viewed by some Iraqi politicians as a tool for the U.S. to pressure Baghdad and influence its regional relationships.
Internal governance and political instability

After the 2003 invasion, Iraq's government has struggled to establish a stable democracy, in part due to institutional failures, corruption, and the lingering effects of sectarian divisions.

Sectarian divisions: Decades of oppression against Shi'a and Kurdish groups under Saddam's Sunni-dominated Ba'athist regime have fueled ongoing sectarian and ethnic tensions.

Political infighting: The sectarian power-sharing system, known as muhasasa ta'ifia, has led to persistent gridlock and a lack of accountability. This has caused public disillusionment, demonstrated by low voter turnout and widespread anti-government protests, such as the Tishreen Movement in 2019.

Militia power: Iran-backed militias have grown into powerful, state-adjacent forces, undermining the central government's authority and control over the economy.

Corruption: Pervasive corruption has hindered post-conflict reconstruction and economic development, with officials and militias often siphoning resources.

Kurdish autonomy: The central government in Baghdad and the semi-autonomous Kurdistan Regional Government (KRG) continue to clash over oil revenue and control of disputed territories. In September 2025, an agreement was reached to restart oil exports from Kurdistan to Turkey after a 2.5-year halt.

Economic challenges
Iraq's economy remains heavily dependent on oil, making it vulnerable to market fluctuations and internal security issues.

Oil dependency: In October 2025, the World Bank projected a 0.9% contraction in Iraq's economy for 2025, largely due to OPEC+ oil production cuts.

High unemployment: Low labor force participation, especially among women, remains a significant challenge.

Rebuilding: While the economy is expected to rebound in 2026-2027, the country still faces major reconstruction needs following years of war.

Many of the young people who joined the wrong movement were martyred often executed for something as simple as owning a book that was not approved by the government.

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