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US halts dollar shipments to Iraq, freezes military aid over militia concerns

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Mourners march in the funeral of a Kataib Hezbollah terrorist after a US airstrike on a Popular Mobilization Forces headquarters near the Iraq-Syria border, pictured in Baghdad, March 2, 2026. (photo credit: REUTERS/Thaier Al-Suda TPX IMAGES OF THE DAY)
The US has halted $500M in dollar shipments to Iraq and frozen military cooperation programs, demanding Baghdad dismantle Iranian-backed militias in response to militia attacks.