Iraq is backtracking after Hezbollah and Houthis were designated as terrorist groups
Iraq’s Committee to Freeze Terrorist Funds said on Thursday it would revise an official list of designated terrorist organizations after pro-Iran figures in the country caused furore over the inclusion of Hezbollah and the Houthis.
Both groups, based in Lebanon and Yemen respectively, are supported by Iran and seek the destruction of Israel. Iran has great influence on politics in neighboring Iraq.
The committee said in a statement carried by Iraq’s state news agency that Baghdad had approved a list of “organizations and individuals linked to ISIS and al-Qaeda” whose funds would be frozen at the Malaysian government’s request. Most of the groups and people on the list were from Southeast Asia.
“The names of other entities were included because the list was published before revision,” the statement said, without naming either Hezbollah or the Houthis. “The Iraqi Gazette is corrected by removing organizations and parties from the list of organizations associated with the terrorist organizations ISIS and Al-Qaeda.”
Iraqi Prime Minister Mohammed Shia al-Sudani’s office subsequently repeated these claims in its own statement to the state news agency. The Prime Minister’s Office also announced an investigation “to determine responsibility and hold those responsible for the error to account.”
Get the daily edition of The Times of Israel
by email and never miss our top stories
By registering you agree to the terms and conditions
The prime minister’s statement also reiterated that Iraq’s position “on aggression against our people in Lebanon or Palestine are matters of principle that are non-negotiable and reflect the will of the Iraqi people,” referring to the wars between Israel and Hamas in Gaza and against Hezbollah in Lebanon that began after the Hamas massacre on October 7, 2023 and the subsequent Hezbollah attack in Israel.
Sudani’s statement comes amid reports in Arab media that he faces an uphill battle to lead his parliamentary bloc – which includes pro-Iranian elements – despite his victory in last month’s elections.
Iraqi Prime Minister Mohammed Shia al-Sudani delivers a speech during a campaign rally for the Reconstruction and Development Coalition list ahead of parliamentary elections on November 2, 2025, in downtown Najaf. (Qassem al-KAABI / AFP)
The decision attracted widespread media attention in Iraq on Thursday morning after pro-Iranian lawmaker Mustafa Sanad suggested on Facebook that Hezbollah and the Houthis were on the list of groups whose funds would be frozen.
He complained that the two Iranian-backed groups “are classified as terrorist organizations” while US President Donald Trump is “nominated for the Nobel Peace Prize.”
“Shame on you,” he added, addressing the Iraqi government, which he said had taken “a shameful stance” that other Arab governments had not taken.
Demonstrators wave Iranian and Hezbollah flags as one holds a poster of Iran’s Supreme Leader Ayatollah Ali Khamenei during a rally marking the Shiite Muslim holiday of Eid al-Ghadir, which commemorates the Prophet Mohammed naming his successor Ali, revered as the first Shiite imam, in Tehran, Iran, June 14, 2025. (AP Photo/Vahid Salemi)
Hussain Mouanes, a lawmaker representing a bloc linked to Iraq’s Kataeb Hezbollah, also criticized the government on Thursday for what he called “irresponsible” behavior.
He accused the government of being a “subordinate authority that lacks the dignity to represent its people or defend Iraq’s sovereignty.”
Hezbollah and the Houthis did not immediately respond to requests for comment.
An Iraqi government adviser quoted by the Qatari newspaper Al-Araby Al-Jadeed said Hezbollah and the Houthis had been designated as terrorist groups under Iraq’s commitments to the US Treasury Department. The USA describes both as terrorist groups. The commitments were made to avoid sanctions against Iraqi institutions, including the country’s central bank and the state oil company, the adviser says.
Another political source cited by the source distanced the Iraqi government from the decision, which the source attributed to the country’s judiciary.
The United States has long sought to reduce Iran’s influence in Iraq and other Middle Eastern countries where Tehran has allies as part of its so-called Axis of Resistance, which has been hit hard by Israel since the war in Gaza broke out in 2023.
Iran views its neighbor and ally Iraq as crucial to keeping its economy afloat despite international sanctions. But Baghdad, a partner of both the United States and Iran, fears becoming the crosshairs of Trump’s policy of pressuring Tehran.
The Islamic Republic wields significant military, political and economic influence in Iraq through its powerful Shiite militias and the political parties it supports in Baghdad. But Iran was weakened by Israel’s heavy strikes against Tehran’s proxy militias last year, making it more vulnerable to U.S. pressure.
Watch DocuNation Season 3: The Heart of Israel
when you join the ToI community
This season of DocuNation is available to stream five terrific Israeli documentaries with English subtitles and then follow along Live online discussion with the filmmakers. The selected films show Israel beyond the conflict: a place of storytellers and musicians, of dreamers, doers and communities rooted in meaning and trust.
If you’re watching DocuNation, so are you Supporting Israeli creators at a time when it is becoming increasingly difficult for them to share their work worldwide.
To learn more about DocuNation: The Heart of Israel, click here.
Support ToI and get DocuNation. Support ToI and get DocuNation. Are you already a member? Log in to stop seeing this
They value our journalism
They clearly find our careful reporting valuable at a time when facts are often distorted and reporting often lacks context.
Your support is essential to continuing our work. We want to continue delivering the professional journalism you value, even as the demands on our newsroom have increased dramatically since October 7.
So consider joining our reader support group today. The Times of the Israel Community. For just $6 a month, you can become our partner and enjoy The Times of Israel at the same time AD FREEand access to exclusive content only available to members of the Times of Israel community.
Thank you very much,
David Horovitz, founding editor of The Times of Israel
Join our community. Join our community. Are you already a member? Log in to stop seeing this
