Dozens of Iraqi Shia militia supporters have broken into the US embassy compound in Baghdad.
Protestors smashed a door and stormed the site, amid tear gas and sounds of gunfire.
An Associated Press reporter at the scene saw flames rising from inside the compound, although it is not clear what caused the fire that was reported to be in a reception area.
Dozens of protestors marched inside the compound after smashing the gate, as a man on a loudspeaker urged those to not enter, saying: "The message was delivered."
Protestors, many in militia uniform, were said to be within 200 metres of the main building.
A handful of US soldiers were reported to have been on the roof of the main building, with their guns pointed at the protestors.
US President Donald Trump blamed Iran for the embassy breach and called on Iraq to protect it.
"Iran killed an American contractor, wounding many," he tweeted.
"We strongly responded, and always will. Now Iran is orchestrating an attack on the US Embassy in Iraq. They will be held fully responsible.
"In addition, we expect Iraq to use its forces to protect the Embassy, and so notified!"
The protests followed American air strikes which killed 25 fighters from an Iranian-backed Shia militia.
The US military carried out the strikes on Sunday against Kataeb Hezbollah.
Washington said the strikes were an act of retaliation for last week's killing of an American contractor in a rocket attack on an Iraqi military base which was blamed on the group.
Protestors at the American embassy hung a poster on the wall, saying "America is an aggressor".
Earlier, the crowd were reportedly chanting "down, down USA" and "death to America" as they raised yellow militia flags and taunted the embassy's security staff.
Stones were thrown over the compound's walls and three trailers used by security guards were set on fire.
Red graffiti was also sprayed on the wall and the windows of the US embassy compound, in support of the Kataeb Hezbollah militia.
No injuries have been reported in the incident.
Cover Image: A Hashd al-Shaabi fighter holds a sign reading "close the American embassy otherwise people will close it", as others attack the embassy.