Troops have deployed around the Iraqi capital Baghdad after the country's Prime Minister survived an assassination attempt.
It significantly heightened tensions sparked by the refusal of Iran-backed militias to accept the parliamentary election results last month.
Seven of PM Mustafa al-Kadhimi's security guards were injured in the attack by at least two armed drones in the city's fortified Green Zone, two officials said.
Unharmed, Mr al-Kadhimi later appeared on Iraqi TV, looking calm in a white shirt. He had a bandage on his left hand and an aide confirmed he has a light cut.
The PM said: "Cowardly rocket and drone attacks don't build homelands and don't build a future."
Baghdad residents heard an explosion and then heavy gunfire from the Green Zone – an area full of foreign embassies and government offices.
Photographs showed the extent of the damage in the PM's house, including smashed window and doors blown off their hinges.
Despite no claim of responsibility for the attack, suspicion immediately fell on Iran-backed militias who had publicly attacked Mr al-Kadhimi and had issued threats.
It came amid a stand-off between security forces and the pro-Iran Shiite militias whose supporters have been camped outside the Green Zone for nearly a month.
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They had rejected the results of Iraq’s parliamentary elections, in which they lost around two-thirds of their seats.
Iran's Foreign Ministry spokesman Saeed Khatibzadeh, in a briefing on Sunday, condemned the assassination attempt on Mr al-Khadimi and indirectly blamed the US.
He said to be aware of "the conspiracies that target the security and progress of Iraq", without elaborating.
Mr Khatibzadeh said such incidents "are in the interests of those parties that have invaded the stability, security, independence and territorial integrity of Iraq over the past 18 years".
The US strongly denounced the attack.
"This apparent act of terrorism, which we strongly condemn, was directed at the heart of the Iraqi state," State Department spokesman Ned Price said.