The IMF recommends strengthening the independence of central banks in the Middle East.
The International Monetary Fund (IMF) has called for a phased approach to strengthening the independence of central banks in the Middle East, North Africa, and Central Asia. This begins with a review of central banking laws, prioritizing price stability, and clearly defining their powers in formulating and implementing monetary policy.
In a report published Tuesday, the IMF emphasized the need for explicit rules to prevent or restrict government financing through central banks, particularly direct purchases of debt instruments or open-ended loans to the treasury. This would limit the central bank's ability to become a financing arm of the government during periods of heightened financial pressure. The report stressed the importance of enhancing the financial independence of central banks by empowering them to approve their own budgets and establishing clear rules for profit distribution, loss coverage, and recapitalization.
This would support their ability to perform their functions independently of short-term public finance needs. The proposed reforms include: improving governance by selecting governors and board members based on competence and experience; adopting overlapping term limits that extend beyond the cycles of political office; and reducing the participation of government representatives on central bank boards to minimize conflicts of interest and strengthen independent oversight. The IMF also recommends publishing monetary policy reports, audited financial statements, and meeting minutes whenever possible.
Explaining decisions to the public and investors is crucial, as the credibility of a central bank rests not only on independence but also on accountability and its ability to articulate its decisions and objectives. The IMF report concluded that central bank independence is linked to a greater capacity to reduce inflation and contain price shocks, particularly in countries with clear monetary policy frameworks that grant their central banks broader powers, shielding them from short-term political and financial pressures.
The report highlights the importance of central bank independence at a time when several countries are facing simultaneous pressures from rising debt costs, expanding government financing needs, volatile food and energy prices, and weakening local currencies in some commodity-importing economies. According to the report, average inflation in the Middle East and Central Asia declined from around 9% between 1981 and 1999 to 5% in the period leading up to 2019, coinciding with a gradual improvement in central bank independence, especially since 2000. The IMF notes that this improvement has not been uniform across countries, with those pegging their currencies, including most Gulf states, achieving better results in maintaining stability. Prices were lower thanks to a clear nominal anchor, while countries with less transparent monetary frameworks or those subject to what the report calls "fiscal dominance" faced greater difficulty controlling inflation.
The concept of fiscal dominance focuses on the pressures that compel the central bank to finance the government or keep interest rates at levels that do not reflect the actual need to curb inflation—pressures that were particularly evident in economies with high domestic debt, chronic fiscal deficits, or a heavy reliance on subsidies and administrative pricing. The inflation test: The inflation that followed the COVID-19 pandemic tested the independence of central banks in the region, according to the report. Prices rose globally due to supply chain disruptions and soaring food and energy costs, and these pressures intensified after the Russia-Ukraine war, forcing central banks to balance curbing inflation with protecting economic recovery.
The IMF says that countries with a clearer price stability mandate and more transparent monetary frameworks have dealt better with inflation. In countries with pegged exchange rates, the credibility generated by the peg helped stabilize inflation expectations, especially when supported by large foreign reserves and a capacity to absorb shocks. In countries with other monetary frameworks, inflation subsequently declined but remained higher than pre-pandemic levels in several cases due to weak transmission of monetary policy to the economy, high dollarization, weak capital markets, and governments' reliance on local banks for financing. The report cites Lebanon as an example of severe deterioration, with what it describes as "eroding confidence in monetary and fiscal policy."
The economic and financial crisis led to hyperinflation, a rapid depreciation of the currency, and a decline in foreign exchange reserves after years of unsustainable fiscal and monetary policies. In Egypt, the report notes that rising domestic debt, pressure on the currency, and the subsequent withdrawal of some subsidies contributed to weakening monetary policy transmission and increasing inflation, despite the passage of a new central bank and banking law in 2020 aimed at modernizing the legislative framework and strengthening oversight.
The report also notes progress in reform models. In several Arab countries, Morocco and Algeria implemented legal and institutional reforms from the 1980s until 2010, focusing on price stability, strengthening the operational and financial independence of central banks, and placing restrictions on deficit financing. Jordan made progress in legal independence, particularly after the 2008 global financial crisis, by improving restrictions on direct lending to the government. Iraq adopted reforms that increased the central bank's independence as part of a broader effort to build monetary institutions after years of instability. Tunisia passed a new central bank law in 2016 that strengthened its role in formulating monetary policy, while Saudi Arabia, under a 2020 regulation, granted its central bank broader powers to regulate the financial sector and achieve its objectives, while continuing to work on strengthening operational independence, accountability, transparency, and legal protection. The IMF does not believe that legal independence alone is sufficient; The gap between legal text and actual practice remains a crucial factor, as a central bank may enjoy legally enshrined independence but, in reality, be subject to political or financial pressures that limit its ability to raise interest rates or tighten credit when inflation conditions warrant it. According to the report, the impact of reforming central bank independence takes time to materialize. The models used indicate that a higher independence index is associated with a decrease in inflation of approximately 0.5 to 0.6 percentage points after one year, with the effect peaking in the fourth year, when inflation remains 0.5 to 0.8 percentage points lower than the baseline.
The IMF notes that countries in the region have made significant progress in strengthening the legal independence of central banks, particularly in the areas of financial independence, disclosure, and reporting. However, it points to persistent institutional weaknesses that impair these banks' ability to act with complete independence when faced with price shocks. According to the report, the most prominent gap lies in central bank governance, specifically in the method of appointing governors and board members, the duration of their terms, and the potential influence of the executive branch on appointment or dismissal decisions. Overall, the Middle East, North Africa, and Gulf countries still lag behind advanced economies in the independence of their central bank boards and governors, according to the report. The issue of government lending is also prominent.
The IMF states that allowing central banks to finance the public sector, or the absence of clear legal constraints on such financing, could blur the lines between price stability and the needs of the treasury, weakening the effectiveness of monetary policy.
There is a divergence among Arab countries. The Gulf states have generally maintained low and stable inflation, supported by their currency pegs to the dollar and their substantial fiscal buffers and reserves. Other countries, such as Egypt, Lebanon, and Tunisia, have faced greater pressure due to the convergence of external shocks and internal imbalances in public finances and exchange rates. The report notes that the Gulf Cooperation Council (GCC) countries began improving the legal independence of their central banks in the late 2000s, developing regulatory and financial frameworks as part of their economic diversification efforts. However, it points out that some restrictions related to government lending and the multiple functions of central banks require clearer legal regulation.
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"America First" in Baghdad: What is Tom Barrack planning for Iraq's "interconnected crises"?
Tom Barrack, 79, is described as more than just a traditional American diplomat. The man of Lebanese descent, who speaks Arabic, combines a background as a businessman and investor with close ties to US President Donald Trump, and in recent months has become one of the most prominent architects of American policy in the Middle East.
Observers believe that his appointment as a special presidential envoy to Iraq and Syria places him at the heart of the most sensitive issues for Washington, from Iranian influence and armed factions to energy, investments, and the future of regional arrangements.
On Sunday, US President Donald Trump announced the appointment of US Ambassador to Turkey Tom Barrack as Special Presidential Envoy to Iraq and Syria, while retaining his position as ambassador in Ankara, stressing that the new mission comes within the framework of strengthening strategic cooperation with the governments of Baghdad and Damascus.
The decision came just one day after US Secretary of State Marco Rubio announced the end of Barak's mission as special envoy to Syria, before it later became clear that the US administration was moving to expand his powers rather than end them.
According to researchers and observers who spoke to Shafaq News Agency, the decision represents an indication of a broader shift in Washington’s approach to Iraq, from an independent file managed through traditional diplomatic channels, to part of an interconnected regional system that includes Syria, Turkey, Iran and the Gulf.
Regional engineering
In this context, Dalir Khalaf Osman, a researcher in international relations and Middle Eastern affairs at the University of Tennessee, believes that merging the Iraqi and Syrian files under the supervision of a single envoy reflects a fundamental shift in American strategy.
Osman tells Shafaq News that the United States no longer deals with Iraq as a separate file with its own internal particularities, but rather as part of a broader security and geopolitical engineering aimed at reshaping the region’s balances and reducing Iranian influence.
This trend is believed to represent a shift from the American approach that has prevailed since 2003, which focused on democracy, development and institution building, to an approach that puts regional security and balances of power at the forefront of priorities.
He adds that Barack’s background, his direct relationship with Trump, and the “America First” doctrine adopted by the US president reveal that his focus will be on strengthening the central state and its security capabilities rather than being preoccupied with issues of democracy, federalism, and political pluralism.
Savaya's mission is complete
In Washington, Patrick Clawson, a senior fellow at the Washington Institute for Near East Policy, reveals that Barak's appointment does not represent a sudden shift as much as it enshrines an existing reality.
Clawson told Shafaq News that Barak's joint appointments in Iraq, Syria and Turkey "are a continuation of an existing policy that he has been leading for some time," noting that he has become a pivotal figure in managing the region's files, including Lebanon as well.
The American researcher reveals that the former envoy to Iraq, Mark Savaya, was effectively dismissed from his post without an official announcement, considering that the decision "was widely arranged and welcomed within the US State Department and within Iraq."
He adds that Savaya, a businessman from Michigan of Iraqi Chaldean descent (from the Nineveh Plain), did not have the diplomatic background to manage a complex file the size of Iraq, and that his experience practically ended before it began.
unconventional approach
From Baghdad, writer and political analyst Ali Al-Baydar believes that Barak’s appointment does not appear to be a mere protocol step, but rather an indication that Washington wants to manage its relationship with Baghdad through political channels directly linked to the White House.
Al-Bader told Shafaq News Agency that the new mission comes within the framework of strengthening strategic cooperation with Iraq, but at the same time it reflects the desire of the American administration to rearrange the files of the region as an interconnected unit that includes Iraq, Syria, Turkey, Iran and Lebanon as well.
He adds that combining the position of ambassador to Turkey with the mission of special envoy to Iraq and Syria reveals an American interest in energy issues, regional balances and border security, as well as taking advantage of Barak’s personal relationships and his ability to combine economics, politics and diplomacy.
Al-Bader believes that Washington is also seeking to manage the files of the American military presence, the international coalition and the relationship with armed factions more directly, with a focus on preventing any escalation that may threaten American interests.
Controlling the factions
While the new envoy has many issues to address, Clawson places the issue of armed factions at the forefront of American priorities. He says that Washington’s most urgent and significant goal is to limit the influence of the Popular Mobilization Forces and ensure that they do not affect the formation of the next Iraqi government, in addition to pressuring Baghdad to impose its full control over the armed factions and prevent any targeting of American forces or interests.
He points out that Barak’s agenda is not limited to security issues, but extends to economic relations, Iraqi oil exports, and investment cooperation.
This assessment coincides with what a number of observers believe, who consider that Washington currently views Iraq through three main files: the weapons of the factions, reducing Iranian influence, and revitalizing economic and investment relations, especially in the energy, gas, electricity, and banking sectors.
"Trump's man"
For his part, Haitham al-Hiti, a professor of political science at the University of Exeter in Britain, says that Barak’s reappointment has closed the door on the speculation that surrounded his future during the past weeks.
Al-Hiti adds to Shafaq News Agency that the man played a pivotal role in the transformations that Syria witnessed during the past period, and that his statements in Damascus, Beirut and Baghdad showed a different approach from the traditional American discourse related to democracy and elections.
Al-Hiti describes Barak as a realistic and straightforward figure who views the region from the perspective of its social, tribal, and historical formations, rather than through traditional Western democratic frameworks.
He points out that his background as a businessman, his Lebanese origins, and his specialization in history and law all give him a deep understanding of the Middle East's structure and complexities.
Al-Hiti believes that Barak tends to support strong central states instead of models based on power-sharing and sectarian divisions, considering him to be one of the most prominent figures of the Trumpian movement seeking to reshape American policy in the region.
Countering Iranian influence
Despite the confidence that the US administration places in Barak, his mission in Iraq appears more difficult than the Syrian file, as Osman says that the biggest challenges he will face are the deep Iranian influence inside Iraq, which extends to politics, the economy and security, unlike the Syrian scene in which the Turkish role was more clear and influential.
He adds that Iraq has multiple and interconnected centers of power, from the government, parties and armed factions to Kurdish forces and regional actors, making any attempt to reshape the balances a highly complex task.
Opportunity or threat?
On the other hand, not everyone agrees with the optimistic view regarding Barak's appointment. Prominent Iraqi politician Mithal Al-Alusi believes that Iraq and the region need "institutional America" more than they need an envoy close to the American president.
Al-Alousi told Shafaq News Agency that some of Barak’s positions and statements raise questions about his understanding of democracy and political pluralism, warning that dealing with Iraq in the same way as the Syrian issue was dealt with may not serve the development of the strategic partnership between Baghdad and Washington.
He adds that Barak’s appointment may be interpreted by some as a retreat from the traditional American institutional approach, or a gray message regarding Iranian and Turkish expansion in the region.
Political analyst Ziad Al-Arar believes that Barak’s appointment reflects a growing American interest in Iraq in the coming period.
Al-Arar told Shafaq News Agency that Iraq will be an essential part of the regional and international scenes, given the complex issues related to weapons, the economy, foreign relations, and the nature of the political system.
He continues that Washington seems willing to build on what it started during the past months, and to work more intensively with the Iraqi government, which explains the choice of a figure of Barak’s stature for this sensitive task.
Trump's envoy: Returning weapons to the state marks the beginning of a new era in Iraq
US President Donald Trump on Tuesday denied that talks between the United States and Iran had stalled in recent days, calling reports to the contrary "false and wrong," and asserting that talks between the two sides continued uninterrupted.
Trump added, in a post on the Truth Social platform, that talks with Iran took place 4 days, 3 days, 2 days and 1 day ago, and continued today, denying the validity of reports that spoke of their suspension.
The US president indicated that the course of these talks remains unclear, saying: "Where these talks will lead, nobody knows."
Trump confirmed that he had told Iran that it was time to reach an agreement, adding: "It's time, one way or another, to make a deal. You've been doing this for 47 years, and it can't be allowed to continue any longer."
Iran’s semi-official Fars News Agency reported on Tuesday that the exchange of messages between Iran and the United States aimed at “reaching a memorandum of understanding and an agreement to end the war” had stopped a few days ago.
Earlier today, a source close to the Iranian negotiating delegation revealed that the text of the proposed memorandum of understanding between Iran and the United States is still under review in Tehran, confirming that the Iranian side has not yet sent any official response.
In contrast, US Secretary of State Marco Rubio announced on Tuesday that there was progress in negotiations with Iran regarding the nuclear program.
Rubio stated in a press conference that the Iranians had agreed to negotiate the abandonment of their nuclear program. The United States is currently negotiating with Iran on points in the nuclear file that it had previously refused to address, as well as on many other issues.
US President Donald Trump confirmed on Monday that he had not received any response from Iran regarding reports that talks had been suspended.
Trump's statement came hours after Iranian media confirmed that Tehran had suspended the exchange of messages with Washington in protest against the Israeli bombing in Lebanon.
The Ministry of Electricity is discussing with representatives of the American company GE ways to accelerate the completion of maintenance and development projects in the production and transmission sectors.
She added that “the meeting reviewed the most prominent projects led by the company in the field of electricity production, and discussed mechanisms to accelerate maintenance and rehabilitation work for power generation stations, in order to increase their readiness and bring them into service as quickly as possible, as well as discussing future plans aimed at developing the performance of the electrical system.”
Trump denies talks with Iran have stopped: They are continuing daily.
US President Donald Trump on Tuesday denied that talks between the United States and Iran had stalled in recent days, calling reports to the contrary "false and wrong," and asserting that talks between the two sides continued uninterrupted.
Trump added, in a post on the Truth Social platform, that talks with Iran took place 4 days, 3 days, 2 days and 1 day ago, and continued today, denying the validity of reports that spoke of their suspension.
The US president indicated that the course of these talks remains unclear, saying: "Where these talks will lead, nobody knows."
Trump confirmed that he had told Iran that it was time to reach an agreement, adding: "It's time, one way or another, to make a deal. You've been doing this for 47 years, and it can't be allowed to continue any longer."
Iran’s semi-official Fars News Agency reported on Tuesday that the exchange of messages between Iran and the United States aimed at “reaching a memorandum of understanding and an agreement to end the war” had stopped a few days ago.
Earlier today, a source close to the Iranian negotiating delegation revealed that the text of the proposed memorandum of understanding between Iran and the United States is still under review in Tehran, confirming that the Iranian side has not yet sent any official response.
In contrast, US Secretary of State Marco Rubio announced on Tuesday that there was progress in negotiations with Iran regarding the nuclear program.
Rubio stated in a press conference that the Iranians had agreed to negotiate the abandonment of their nuclear program. The United States is currently negotiating with Iran on points in the nuclear file that it had previously refused to address, as well as on many other issues.
US President Donald Trump confirmed on Monday that he had not received any response from Iran regarding reports that talks had been suspended.
Trump's statement came hours after Iranian media confirmed that Tehran had suspended the exchange of messages with Washington in protest against theIsraeli bombing in Lebanon.
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Breaking | Iraq elected Vice-President of the United Nations General Assembly
The Ministry of Foreign Affairs announced on Tuesday that the Republic of Iraq was elected as Vice-President of the United Nations General Assembly at its eighty-first session, considering this achievement a reflection of the great international confidence that the country enjoys.
A statement from the ministry, received by the Iraq Observer Agency, said that “this new diplomatic achievement represents a tangible result of the balanced and moderate foreign policy pursued by the Iraqi government in its international and regional relations.”
The statement added that “Iraq, through assuming this high-ranking UN position, looks forward to contributing effectively and seriously to supporting and guiding the United Nations’ efforts to achieve the 2030 Sustainable Development Goals, as well as strengthening the foundations of global security and stability.”
UN General Assembly elects Iraq Vice President
Iraq secured the vice presidency of the 81st session of the United Nations General Assembly on Tuesday, the Iraqi Foreign Ministry announced on Tuesday.
Iraq's election reflects the confidence it enjoys within the United Nations and the broader international community, the Foreign Ministry stated, citing the country's role in promoting South-South and trilateral cooperation and facilitating consensus among developing nations on key priorities within the organization.
The ministry indicated that Iraq intends to use the position to contribute to UN efforts aimed at achieving the 2030 Sustainable Development Goals, support initiatives to improve the efficiency of the General Assembly, and strengthen the country's role on the international stage.
Washington Hits Iran's Crypto Sector with New Sanctions as Economic Fury Intensifies
The United States has imposed sweeping new sanctions on Iran's largest digital asset exchange and three similar platforms, accusing them of helping Tehran finance the IRGC
The US Treasury Department's Office of Foreign Assets Control (OFAC) on Tuesday designated Nobitex — Iran's largest cryptocurrency exchange — along with three other Iranian digital asset platforms, as part of the Trump administration's "Economic Fury" operation targeting Tehran's financial lifelines.
According to the Treasury's statement, Nobitex processed more than 50 percent of all Iranian digital asset inflows in 2025 and facilitated payments tied to Iran's terrorist activities, sanctions evasion efforts, and transactions linked to the Islamic Revolutionary Guard Corps — including activity associated with IRGC-affiliated ransomware actors.
The platform also helped the Central Bank of Iran access hundreds of millions of dollars in stablecoins, which were used to prop up the plummeting value of the Iranian rial, while enabling regime insiders to reach international digital asset exchanges and evade sanctions across multiple jurisdictions.
Following the start of US combat operations in Iran, Treasury said Nobitex played a role in protecting and moving assets out of the country to shield regime wealth, even during internet blackouts.
OFAC also designated Amir Hossein Rad — Nobitex's chairman, co-founder, and former chief executive — along with numerous other company leaders and officials.
Treasury Secretary Scott Bessent framed the action as proof that the Trump administration's maximum pressure strategy is working.
"While Iran's economy is in free fall, the regime has chosen to co-opt digital asset technologies for its own corrupt agenda, including evading sanctions and transferring wealth out of the country," Bessent said. "Iran's current economic chaos is proof that President Trump's maximum pressure campaign has been a success."
He added that the Treasury would continue to pursue Iranian finances across both the banking system and digital asset channels. "Treasury will continue to follow the money in support of Economic Fury, whether it is through the banking system or through digital assets, to prevent the regime from developing a nuclear weapon," he said.
The designations were made under counterterrorism authority Executive Order 13224, as well as Executive Order 13902, which targets individuals and entities operating in Iran's financial sector. The action forms part of the broader sanctions strategy outlined in President Trump's National Security Presidential Memorandum 2, which instituted a campaign of maximum economic pressure on Iran.
Separately, the US State Department's Rewards for Justice program is offering up to $15 million for information leading to the disruption of the IRGC's financial mechanisms and those of its various branches.
The United States has imposed sweeping new sanctions on Iran's largest digital asset exchange and three similar platforms, accusing them of helping Tehran finance the IRGC
The US Treasury Department's Office of Foreign Assets Control (OFAC) on Tuesday designated Nobitex — Iran's largest cryptocurrency exchange — along with three other Iranian digital asset platforms, as part of the Trump administration's "Economic Fury" operation targeting Tehran's financial lifelines.
According to the Treasury's statement, Nobitex processed more than 50 percent of all Iranian digital asset inflows in 2025 and facilitated payments tied to Iran's terrorist activities, sanctions evasion efforts, and transactions linked to the Islamic Revolutionary Guard Corps — including activity associated with IRGC-affiliated ransomware actors.
The platform also helped the Central Bank of Iran access hundreds of millions of dollars in stablecoins, which were used to prop up the plummeting value of the Iranian rial, while enabling regime insiders to reach international digital asset exchanges and evade sanctions across multiple jurisdictions.
Following the start of US combat operations in Iran, Treasury said Nobitex played a role in protecting and moving assets out of the country to shield regime wealth, even during internet blackouts.
OFAC also designated Amir Hossein Rad — Nobitex's chairman, co-founder, and former chief executive — along with numerous other company leaders and officials.
Treasury Secretary Scott Bessent framed the action as proof that the Trump administration's maximum pressure strategy is working.
"While Iran's economy is in free fall, the regime has chosen to co-opt digital asset technologies for its own corrupt agenda, including evading sanctions and transferring wealth out of the country," Bessent said. "Iran's current economic chaos is proof that President Trump's maximum pressure campaign has been a success."
He added that the Treasury would continue to pursue Iranian finances across both the banking system and digital asset channels. "Treasury will continue to follow the money in support of Economic Fury, whether it is through the banking system or through digital assets, to prevent the regime from developing a nuclear weapon," he said.
The designations were made under counterterrorism authority Executive Order 13224, as well as Executive Order 13902, which targets individuals and entities operating in Iran's financial sector. The action forms part of the broader sanctions strategy outlined in President Trump's National Security Presidential Memorandum 2, which instituted a campaign of maximum economic pressure on Iran.
Separately, the US State Department's Rewards for Justice program is offering up to $15 million for information leading to the disruption of the IRGC's financial mechanisms and those of its various branches.
Treasury sanctions Iran’s largest crypto exchange Nobitex
Iraqi PM proposes US-backed investment plan linked to weapons control
Iraqi Prime Minister Ali al-Zaidi has proposed a plan to the United States that would link the expansion of US-led service and investment projects in Iraq to efforts to restrict weapons to state control and facilitate the disarmament of armed factions, a political source told Shafaq News on Tuesday.
The proposal aims to shift the weapons issue from a direct security challenge into a broader political and economic settlement by providing practical alternatives for faction members, particularly through employment opportunities and productive development projects.
"Al-Zaidi believes that the involvement of American companies in service and investment sectors could provide the government with economic and political support for implementing a gradual disarmament plan," the source said, adding that It would also seek to create jobs for young Iraqis, integrate some faction members into the labor market, and reduce their reliance on armed formations operating outside state institutions.
Earlier in the day, Asaib Ahl al-Haq (AAH), one of Iraq's most powerful Iran-aligned armed factions, announced the formation of an internal central committee tasked with implementing the group's disengagement from Popular Mobilization Forces structures and transferring its weapons, personnel, and equipment to state authority.
Ashab al-Kahf, also one of Iraq's prominent clandestine armed groups, rejected outright any political calls for factions to surrender their weapons, dismissing arguments invoking the supreme Shia religious authority in support of disarmament as false. Kataib Hezbollah welcomed efforts to centralize arms under government oversight while signaling it would not disarm.
Al-Zaidi has made weapons restriction a central plank of his government program, welcoming al-Sadr's earlier disarmament initiative as a step that would strengthen Iraq's security institutions in performing their constitutional duties, and calling on other armed factions to follow through official state channels, on the principle that “the authority to bear arms and enforce the law belongs exclusively to the state.”
US Central Command targets oil tanker engine room with missile
Iraqi Prime Minister Ali al-Zaidi has proposed a plan to the United States that would link the expansion of US-led service and investment projects in Iraq to efforts to restrict weapons to state control and facilitate the disarmament of armed factions, a political source told Shafaq News on Tuesday.
The proposal aims to shift the weapons issue from a direct security challenge into a broader political and economic settlement by providing practical alternatives for faction members, particularly through employment opportunities and productive development projects.
"Al-Zaidi believes that the involvement of American companies in service and investment sectors could provide the government with economic and political support for implementing a gradual disarmament plan," the source said, adding that It would also seek to create jobs for young Iraqis, integrate some faction members into the labor market, and reduce their reliance on armed formations operating outside state institutions.
Earlier in the day, Asaib Ahl al-Haq (AAH), one of Iraq's most powerful Iran-aligned armed factions, announced the formation of an internal central committee tasked with implementing the group's disengagement from Popular Mobilization Forces structures and transferring its weapons, personnel, and equipment to state authority.
Ashab al-Kahf, also one of Iraq's prominent clandestine armed groups, rejected outright any political calls for factions to surrender their weapons, dismissing arguments invoking the supreme Shia religious authority in support of disarmament as false. Kataib Hezbollah welcomed efforts to centralize arms under government oversight while signaling it would not disarm.
Al-Zaidi has made weapons restriction a central plank of his government program, welcoming al-Sadr's earlier disarmament initiative as a step that would strengthen Iraq's security institutions in performing their constitutional duties, and calling on other armed factions to follow through official state channels, on the principle that “the authority to bear arms and enforce the law belongs exclusively to the state.”
The US Central Command announced on Wednesday (June 3, 2026) that it carried out a military operation targeting an oil tanker in territorial waters, using a Hellfire missile, after what it described as the tanker's failure to comply with orders to stop.
The command stated in a brief statement that it "announces the targeting of an oil tanker's engine room with a (Hellfire) missile."
She added that "the tanker ignored US orders to stop trying to reach Iran's Kharg Island," noting that "after warnings that lasted 24 hours, the tanker was disabled by a missile strike on the engine room."
These developments come amid escalating tensions in the Arabian Gulf region, particularly with the intensification of US pressure on Iranian-related shipping, in what is described as an attempt to impose indirect restrictions on its maritime and economic activity.
The Strait of Hormuz is considered one of the world's most strategic waterways, through which a significant percentage of global oil exports pass, making it a sensitive flashpoint in any regional escalation.
Washington: Iran will receive frozen assets in proportion to the concessions it makes.
US Secretary of State Marco Rubio stated on Tuesday that the amount of frozen Iranian assets Iran receives is directly proportional to the concessions Tehran makes. During a Senate hearing, Rubio said, "Regarding the issue of frozen assets, the more concessions they make, the more they will gain in return."
Rubio: A bad deal with Iran is worse than no deal.
US Secretary of State Marco Rubio warned on Tuesday that if Iran insists on closing the Strait of Hormuz, the blockade will remain firmly in place. He added that Washington is currently negotiating with Iran on points in the nuclear file that it had previously refused to address.
He emphasized, "A bad deal with Iran is worse than no deal." Rubio told the Senate Foreign Relations Committee, "We are in the process of negotiating many points with Iran, and we will not allow Iran to acquire a nuclear weapon to hide behind."
On Tuesday, Rubio faced a barrage of questions about the fragile or faltering diplomatic efforts of President Donald Trump's administration during two consecutive hearings before the House and Senate, the first such appearance since the start of the campaign against Iran. He noted that Iran had repeatedly refused to negotiate on its nuclear program but has now backed down and agreed.
Rubio expressed hope for a mutually acceptable outcome regarding the Strait of Hormuz, emphasizing that Iran's traditional deterrent capability has significantly eroded. He added that the Iranian regime is fractured and that obtaining a response from its leadership will take days, noting that the Iranians have agreed to negotiate abandoning their nuclear program.
The US Secretary of State stated that any easing of sanctions against Iran would be contingent upon genuine nuclear commitments, stressing, "We will not reduce sanctions on Iran simply because they open the Strait of Hormuz." He added that Iran is under sanctions because it enriches uranium to high levels, and "we want genuine commitments from Iran regarding its nuclear program before any sanctions reduction."
Rubio pointed out that no country supports the continued closure of the Strait of Hormuz, including China and Russia. The Secretary of State said, "If Iran agrees to stop targeting ships, we will end the blockade... The US blockade is due to Iran's continued closure of the Strait of Hormuz."
US chargé d'affaires presses Iraq on regional threats
US Chargé d'Affaires to Iraq Joshua Harris said Tuesday that ending threats emanating from Iraqi territory is essential to regional peace, following a meeting with Iraqi President Nizar Amedi.
In a post on X, Harris also valued a productive discussion with Amedi “on shared priorities for a strong and mutually beneficial U.S.-Iraq partnership.”
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Earlier Tuesday, Harris met with National Security Adviser Qasim al-Araji, where he praised the Coordination Framework's
Weapons control is becoming a reality
The issue of restricting weapons to the state has taken center stage in the political and security scene, following a series of successive initiatives that began with Mr. Muqtada al-Sadr’s announcement of the disassociation of the Peace Brigades and their direct linkage to the Commander-in-Chief of the Armed Forces, in a step that was considered to be opening the way for other factions to engage in the state project.
Later, on Tuesday, Asa'ib Ahl al-Haq announced the formation of a central committee to begin implementing the decision to sever ties with the Popular Mobilization Forces and to organize mechanisms for reporting to the Commander-in-Chief of the Armed Forces. Similarly, Kata'ib al-Imam Ali decided to proceed with similar measures, emphasizing that "the battle today is a battle to build a strong, capable state with full sovereignty over its land and airspace."
These steps were widely welcomed officially; President Nizar Amidi praised these initiatives, stressing that the strength and prestige of the state are embodied in its constitutional and legal institutions, while Speaker of Parliament Hebat al-Halbousi described these positions as "responsible," stressing that building a strong state requires monopolizing military and security decisions in accordance with the law and the constitution.
The Coordination Framework, during its periodic meeting the day before yesterday, in the presence of Prime Minister Ali al-Zubaidi, announced its full support for the weapons control project, and authorized the Prime Minister to take the necessary measures to preserve the country's higher interests, based on the constitution and the Popular Mobilization Forces Law No. (40 of 2016), and in implementation of the directives of the religious authority.
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Parliamentary positions were also supportive; MP Kazem Attiya al-Shammari affirmed that the integration of armed groups into state institutions represents a step toward strengthening the rule of law, while Parliamentary Rapporteur Kulsil al-Mukhlis stressed that strengthening state sovereignty begins with the state controlling the possession of weapons. The Parliamentary Security and Defense Committee praised these initiatives, considering them important steps toward consolidating security and stability.
Political observers believe that these transformations represent a practical embodiment of the first axis of the government program, and may constitute a strategic shift in the relationship between political forces and armed factions, thereby strengthening the legitimacy of the state and supporting Ali al-Zaidi’s government in its efforts to consolidate stability.
US praises the Coordination Framework's stance supporting the restriction of weapons and the disengagement from the Popular Mobilization Forces.
The acting US ambassador to Baghdad, Joshua Harris, praised the position of the coordinating framework supporting the state’s monopoly on weapons and severing any ties of the Popular Mobilization Forces outside the official defense system.
The praise came during a meeting he had with National Security Advisor Qasim al-Araji, where they discussed the overall regional and international situation, the latest developments in the region, and the course of cooperation and partnership between Iraq and the United States.
During the meeting, both sides affirmed their support for the Iraqi government’s measures regarding the state’s monopoly on weapons, considering the Coordination Framework’s position an important step towards strengthening stability and consolidating state authority.
According to a statement from the National Security Advisory, the meeting also addressed prospects for developing bilateral relations in accordance with common interests, and continued coordination on issues of common interest, in order to enhance security and stability in Iraq and the region.
For his part, Al-Araji reaffirmed Iraq’s firm stance on regional developments, and Baghdad’s commitment to adopting peaceful and diplomatic solutions in dealing with crises.
The acting US ambassador expressed his country’s support for Iraq and its sovereignty, stressing the importance of directing efforts towards the economy and development, and describing the position of the coordination framework as a positive step in the path of strengthening state sovereignty.
"An important step forward"
Trump's envoy congratulates al-Zaidi on disarming Asa'ib Ahl al-Haq: This is just the beginning
US President’s envoy to Iraq, Tom Barrack, congratulated Iraqi Prime Minister Ali al-Zubaidi on Tuesday (June 2, 2026) on the agreement by Asaib Ahl al-Haq and other factions to return all weapons to the Iraqi state and sever their ties with the Popular Mobilization Forces, indicating that this step represents only the beginning of the re-establishment of a renewed Iraqi government.
The Asaib Ahl al-Haq movement, the Imam Ali Brigades, and before them the Peace Brigades, announced their decision to join the initiative to restrict weapons to the state, and to form committees to proceed with this matter.
In a post commenting on al-Zaidi’s statement regarding the disarmament of Asaib Ahl al-Haq, Barak said, “We extend our warmest congratulations to the Iraqi Prime Minister on this important step forward, which represents the cornerstone of a renewed Iraqi government, based on restored sovereignty, lasting stability, and the promise of national renaissance.”
Barak added, “We also commend the groups whose initial decision to return all weapons to the Iraqi state will contribute to building order. Prime Minister al-Zaidi’s confidence is well-placed; this is just the beginning.”
The Sayyid al-Shuhada Brigades agree with the position of the Hezbollah Brigades, which still rejects calls to restrict weapons. In fact, the security official of the faction, Abu Mujahid al-Assaf, announced in a statement (May 30, 2026) the readiness of the brigades to receive the weapons of the factions that have abandoned armed action and to pay for them, saying: “We are ready to receive some special weapons for which there are no specialists in the state apparatus, such as drones, suicide aircraft, cruise missiles and anti-tank missiles, and we are also ready to pay for them.”
Yesterday, the Coordination Framework announced its support for the project to restrict weapons to the state and to sever the Popular Mobilization Forces’ ties with all political, partisan, and social frameworks, in order to ensure continued cooperation between the Iraqi government and the international community and to complete the implementation of ending the mission of the international coalition in Iraq.
This comes at a time when the leader of the Shiite National Movement, Muqtada al-Sadr, announced on Wednesday (May 27, 2026) the separation of the Peace Brigades from the movement and their affiliation with the state, in a move he described as aiming to end the partisan affiliations of armed formations and to strengthen the principle of restricting weapons to the state.
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