The United States blocked a plane carrying nearly $500 million in banknotes from delivering the cash to Iraq, U.S. media has reported, piling pressure on Baghdad to fight Iran-backed militant groups.
The Wall Street Journal said Washington has suspended cash shipments to Iraq and frozen funding for security programs following attacks on U.S. interests in the country by groups showing solidarity with Iran.
Iraq has long walked a tightrope between the competing influences of its allies, neighboring Iran and the United States.
However, Iraqi leaders have struggled to maintain that delicate balance as war engulfs the Middle East.
An Iraqi security official confirmed to AFP that the United States has suspended its security cooperation with Iraq over factions targeting U.S. interests.
The U.S. State Department said this month it had summoned Iraq's ambassador to Washington to express "strong condemnation" of attacks by pro-Iran groups on U.S. interests, "including the April 8 ambush of American diplomats in Baghdad."
The U.S. embassy in Baghdad and a logistical and diplomatic centre inside the city's airport have been repeatedly targeted by rockets and drones, with most intercepted, since the war broke out on Feb. 28.
The Wall Street Journal reported that the US Treasury Department blocked a shipment of nearly $500 million in cash from Iraqi oil sales, quoting U.S. and Iraqi officials.
