Washington is ramping up economic pressure to try to counter Iranian influence in the Middle East.
Iraqi officials raised the death toll to 25 on Sunday after attacks by unidentified gunmen who targeted anti-government demonstrators near the main protest camp in Baghdad.
More than 130 others were also wounded by gunfire and stabbings near Tahrir Square on Friday night, the main protest camp in the Iraqi capital.
It was the most violent flare-up for weeks and came a week after parliament accepted prime minister Adel Abdul Mahdi’s resignation following two months of huge protests demanding his departure and the overhaul of the country’s political system.
Iraq’s parliament was to hold an emergency session on Sunday to discuss the bloodshed.
Gunmen on pick-up trucks late on Friday attacked a large building near the al-Sinak bridge where anti-government protesters had been camped out for weeks.
“According to our sources, this violence began late last night around Khilani Square that’s just north of Tahrir Square,” Al Jazeera’s Dorsa Jabbari said on Saturday, reporting from Baghdad.
The attackers forced the protesters out of the building and live rounds could be heard after the altercation.
State television said the building had been torched “by unidentified men”.
The attacks claimed the lives of 22 protesters and three policemen, officials said.
Some protesters accused the government of colluding with the masked gunmen, pointing to a power outage that happened around the same time as the attacks.
But a senior electricity ministry official, who requested anonymity in line with regulations, denied the allegation. The official said it would have been easy for anyone to cut the power lines.
Jabbari said the violence was an escalation “in terms of the division that’s being created within the demonstrations and the various groups that are trying to take control of the voice on the streets of Baghdad”.
The attacks came a day after a string of suspicious stabbing incidents left at least 13 wounded in Baghdad’s Tahrir Square, the epicentre of Iraq’s leaderless weeks-long protest movement.
More than 400 protesters have been killed and nearly 20,000 wounded since anti-government demonstrations erupted on October 1.
Separately, an armed drone targeted the home of Iraqi Shia leader Muqtada al-Sadr in the southern city of Najaf, hours after his supporters deployed in Baghdad in response to the attacks on demonstrators, according to his office.
“This is a clear attack that could kindle a war – maybe a civil war – in Iraq. Self-restraint is essential,” said al-Sadr’s spokesman Salah al-Obeidi.
A source from al-Sadr’s party said “only the external wall was damaged” in the attack, adding al-Sadr was currently in Iran.
Many of those who arrived in Baghdad after Friday’s attack were suspected to be members of Saraya al-Salam (Peace Brigades), a militia headed by al-Sadr.
The Shia leader had previously supported Abdul Mahdi’s government but has since backed the protest movement . A source from Saraya said al-Sadr sent his followers to the streets after Friday’s attack to “protect protesters”.
According to Iraqi researcher Zeidon al-Kinani, the attack on Sadr’s compound may have been an attempt to pull the Shia leader into the protest movement as a “spiritual leader”.
“The government and the pro-Iranian militias are very aware that this is one of the main things the protesters were against since the early stages of the revolution,” al-Kinani told Al Jazeera.
“The protesters refused to have any of the old faces, whether they are in the government or in the ethnic sectarian quota – which Muqtada al-Sadr was himself a part of,” he said.
Street protests have roiled Iraq since early October, with demonstrators calling for the resignation of the government, the dissolution of Parliament and an overhaul of the country’s political system, which has been in place since the 2003 US-led invasion of Iraq.
The demonstrations turned violent amid accusations from rights groups that Iraqi security members used excessive force against protesters.
On Friday, Iraq’s top Shia leader Ali al-Sistani voiced support for the protests, calling them a “tool of pressure to affect genuine reforms”.
“What matters most is that they [the protests] should not be dragged into acts of violence, chaos and sabotage,” according to a mosque sermon read on his behalf in the southern city of Karbala.
Al-Sistani said a new prime minister must be chosen without foreign interference.
His comments followed reports that a senior Iranian commander had been in Baghdad this week to rally support for a new government that would continue to serve Iran’s interests.
Abdul Mahdi and his government are now serving in a caretaker status until a new cabinet is formed.
Iraqi authorities have repeatedly accused “outlaws” of taking advantage of peaceful protests to attack demonstrators and security forces, and vandalising public and private property.