US plans to cut off military aid to key Middle East ally, BBC told

The Trump administration is planning to cut off military aid to a key Middle East ally that helped the US defeat the Islamic State group (IS) and is now facing punishing attacks from Iran, according to four sources familiar with the matter.

The US Department of Defense has told leaders of Iraq's semi-autonomous Kurdistan region in recent meetings that the administration is not planning to renew an expiring agreement that provides security assistance to the Peshmerga, the Kurdish security force.

The BBC spoke to two officials who participated in the talks and two other sources with direct knowledge of the issue. The sources spoke on the condition of anonymity to describe the talks, details of which have not been previously reported.

Kurdish officials fear the funding cut would create a power vacuum and embolden Iran, which has fired hundreds of missiles and drones into Iraqi Kurdistan since US President Donald Trump started the war with Tehran.

Ending the Peshmerga's security assistance would undermine a longtime partner in Iraq, analysts said, and send the message that the US cannot be trusted to back its allies in the region.

"The US would be cutting off the Kurds, who shed so much blood to help the Americans achieve their goals in Iraq and the wider Middle East," Yerevan Saeed, the director of the Global Kurdish Initiative for Peace at American University, said.

"This is going to be a big win for Iran, China, and Russia if the Kurds are left so exposed."

In his second term, Trump has pledged to reduce America's foreign entanglements in regions like the Middle East. He also launched the war with Iran, which reached the six-month mark on Friday with no end in sight.

The memorandum of understanding between the Pentagon and the Kurdish Regional Government (KRG) is set to expire on 30 September, the same day the US and other nations are withdrawing their last remaining troops from Iraq.

The troop withdrawal will formally end the international military campaign against IS, in which the Peshmerga fought alongside coalition troops to end the jihadist group's control of parts of Iraq and Syria. The sole remaining US military base in the country, located in the Iraqi Kurdish capital of Irbil, is set to close next month once coalition troops leave.

The Peshmerga, which has approximately 180,000 troops in Iraqi Kurdistan, received $61m (£45m) in the fiscal year 2026 for weapons, military training and stipends through the Pentagon's counter-IS programme.

The Pentagon proposed cutting all the group's security aid in its fiscal year 2027 budget request - arguing that since IS was defeated the money should now be reallocated - but the spending plan is on hold amid a broader budget battle in Congress.

The request raised alarm bells in Iraqi Kurdistan, but officials had held out hope that the US would renew the funding through an extension of the current deal.

The fears have only grown as Iran has stepped up attacks against the KRG. Iran and Iranian-backed militias had conducted 158 missile or drone attacks inside Iraqi Kurdistan by late May, according to reasearch on the latest available data compiled by the Foundation for Defense of Democracies, a Washington DC think tank.

But despite the surge in attacks, in recent talks with Iraqi and Kurdish leaders, defence department officials said the US was not planning to extend the memorandum of understanding, multiple sources with knowledge of the discussions said. The Pentagon signed the initial memorandum of understanding giving military assistance to the Peshmerga in 2016 and renewed it in 2022.

A final decision on security engagement between the US and Kurdistan is still being reviewed, according to one source familiar with the Pentagon's thinking. The US is considering ways to maintain some security support in both Iraq and Iraqi Kurdistan after the troop withdrawal, the sources said.

Both the KRG and US State Department declined to comment.

In response to questions about security assistance for the Peshmerga, a Pentagon spokesperson referred to a statement by the department summarising Defence Secretary Pete Hegseth's meeting with Iraqi Prime Minister Ali al-Zaidi in July.

"The United States, Iraq and Coalition partners have achieved tremendous success in defeating ISIS and now the Iraqi Security Forces, including the Peshmerga and other Iraqi Kurdistan Region security forces, will lead the fight against terrorists in Iraq," the statement said.

The expiration of the security aid for the Peshmerga would come less than one year after the US opened its largest consulate in the world, in Irbil.

At the ribbon-cutting ceremony for the $800m complex last December, Michael Rigas, a senior US State Department official, said the consulate was "a testament to the value of the relationship between the United States and the Iraqi Kurdistan Region".

The recent discussions around Kurdish security were part of larger conversations between the US, the Iraqi government and KRG over the upcoming troop withdrawal. That date was set under a 2024 agreement between Washington and Baghdad to withdraw the US troops that remain in Iraq from the campaign against IS. American combat troops left Iraq in 2011 but returned after the power vacuum led to the rise of IS in 2014.

The US could avoid repeating the same mistake by continuing to back the Peshmerga, said James Jeffrey, who spearheaded the global coalition against IS in Trump's first term.

"It's money well spent, as we found out when the Islamic State rolled into northern Iraq," said Jeffrey, a former US ambassador to Iraq and Turkey under the Obama administration.

The Trump administration has not said how many US troops brought in to fight IS more than a decade ago remain in Iraq. Experts believe it's under 1,000, down from 170,000 at the height of the Iraq War.

The recent meetings on Iraqi security included the White House, Defense and State Departments, with Tom Barrack acting as a principal US voice on Iraq, four sources said. A close Trump ally, Barrack is the US ambassador to Turkey and special envoy to Iraq and Syria.

The administration has said publicly it's open to a bilateral security agreement with Iraq. The countries discussed a possible defence pact in the recent meetings, but it's still unclear how the agreement might be structured or what Iraqi Kurdistan's role might be.

Al-Zaidi touted the troop withdrawal during his visit to Washington last month. Al-Zaidi, who was elected in May, met Trump at the White House, as well as Hegseth and members of Congress.

"October 1 will mark a new day in the trajectory of the Iraqi state, as Iraq will be free of any foreign military presence," al-Zaidi's office said in a statement at the time.

The withdrawal will reduce the exposure of US troops in the Middle East who have been targeted by Iran during the war, analysts said. Tehran has attacked US bases across the region, including the base in Irbil.

But it will leave the Peshmerga security force and the rest of the region it helps protect even more vulnerable than before, said Jason Campbell, a former US defence official.

"The Peshmerga have been the frontline in the US and international war with ISIS," said Campbell, an expert at the Middle East Institute. "If the US moves forward with this, it'll make the Kurds perhaps the most vulnerable potential targets of Iran."