BAGHDAD — Dozens of attacks on U.S. military facilities by Iran-backed factions in Iraq over the past two months as the Israel-Hamas war has raged have forced Baghdad into a balancing act that's becoming more difficult by the day.
A rocket attack on the sprawling U.S. Embassy in Baghdad on Friday marked a further escalation as Iraqi officials scramble to contain the ripple effects of the latest Middle East war.
Iran holds considerable sway in Iraq and a coalition of Iran-backed groups brought Iraqi Prime Minister Mohammed Shia al-Sudani to power in October 2022. At the same time, there are some 2,000 U.S. troops in Iraq under an agreement with Baghdad, mainly to counter the militant Islamic State group.
Baghdad also relies heavily on Washington's sanctions waivers to buy electricity from Iran, and since the 2003 U.S. invasion, Iraq's foreign currency reserves have been housed at the U.S. Federal Reserve, giving the Americans significant control over Iraq's supply of dollars.
Al-Sudani's predecessors also had to walk a delicate line between Tehran and Washington, but the Israel-Hamas war has considerably upped the stakes.
Since the war erupted on Oct. 7, at least 92 attacks on U.S. bases in Iraq and Syria have been claimed by an umbrella group of Iran-backed Iraqi militants dubbed the Islamic Resistance in Iraq. The militants say their attacks are in retaliation for Washington's backing of Israel and its…