Overnight on October 14, threats of an attack by Shi’a militias on Kurdish Peshmerga guarding Kirkuk in Iraq led to a flurry of activity. Hundreds of armed Kurdish men and some women mustered on the streets of the city that is the center of a dispute between the Kurdistan Regional Government (KRG) and the central government.Their appearance was a symbol of defiance to Baghdad. Ultimatums for the Kurds to withdraw came and went and by August 15, the crisis seemed to have calmed.The US and Tehran are watching with keen interest what happens in Kirkuk. If the Iranian- backed Shi’a militias attack the Kurds alongside Iraqi regular units, US diplomacy will have failed and the Americans who lead a massive coalition against ISIS will have to make tough choices about Iraq. One choice could involve reprising support for Baghdad due to the Islamic Revolutionary Guard Corps (IRGC) backing the Shi’a militias that are part of Iraqi security forces.The crisis in Kirkuk involves demands by Iraqi forces south of the city for Kurdish forces to withdraw from some areas nearby. “Iraqi forces have threatened to attack Peshmerga positions southwest of Kirkuk at midnight [October 14] unless all forces stand down,” tweeted the Kurdistan Region Security Council.But Iraqi Prime Minister Haider Abadi sounded more conciliatory, saying his forces would not attack Iraqi citizens, “whether Arab or Kurd.” He called the threats “fake news.”The Kirkuk crisis is not strictly a conflict between Baghdad and Erbil’s autonomous KRG. Nor is it just about the Kurdistan referendum in September. Baghdad wants oil fields and an airport near Kirkuk under its control.Kurdish politics in Kirkuk are divided between the Patriotic Union of Kurdistan (PUK) and the Kurdistan Democratic Party (KDP). PUK leaders – such as Bafel Talabani, son of the late Kurdish leader, and former Iraqi President Jalal Talabani – seek dialogue with Baghdad and local KDP leaders such as Dr. Kemal Kirkuki, vowing to defend Kirkuk. Similarly, Baghdad is divided between groups that want negotiations with Kurdistan and the more extreme elements of the Hashd al-Shaabi, or Shi’a militias, often called Popular Mobilization Units. These militias are connected to their own political parties such as the Badr Organization, whose members control the Interior Ministry in Baghdad.According to journalist Fazel Hawramy, PMU leaders Hadi Amiri and Abu Mahdi al-Muhandis went to Kirkuk on October 15 to negotiate. Both Amiri and al-Muhandis worked with the Iranian IRGC in the 1980s against Saddam Hussein’s regime and remain close to its leadership. Not by coincidence, Iranian Maj.-Gen. Qassem Soleimani arrived in Kurdistan on October 15th, according to Reuters. Soleimani is the commander of the Quds Force of the IRGC, the organization responsible for external operations of the IRGC.The role of two senior PMU commanders and Soleimani from Iran indicate the battle for Kirkuk has been outsourced by Iraq to Tehran. It is also evidence of the overall inability of Abadi to control the Shi’a militias that, since 2016, have been officially part of the Iraqi Security Forces. This runs counter to US support for a unified and stable Iraq.On October 13th, the US Treasury sanctioned the IRGC, with Treasury Secretary Steven Mnuchin labeling it a “central role to Iran becoming the world’s foremost state sponsor of terror.” Support for the Quds Force was mentioned in a Treasury Department statement as a key element of the designation. Groups such as Hamas and Hezbollah were also mentioned. “The IRGC used both IRGC bases and civilian airports to transfer military equipment to Iraq and Syria for the IRGC-QF [Quds Force].”Moves by Soleimani and the Shi’a militia commanders in Iraq will be watched more closely by the US in the wake of Trump’s speech on October 13. “In Iraq and Afghanistan, groups supported by Iran have killed hundreds of American military personnel,” Trump said.Iran has been defiant. Foreign Minister Javad Zarif, who negotiated the Iran deal, tweeted on October 14, “Today Iranians – boys, girls, men, women – are ALL IRGC, standing firm with those who defend us and the region against aggression and terror.”Quds deputy head Esmail Ghaani threatened the US in the wake of the sanctions.This puts the US-led coalition and US relations with the Iraqi Army in an awkward position. The coalition is working with Iraqi Security Forces to defeat ISIS in western Iraq. However, the conflict over Kirkuk has overshadowed that campaign. Up to now, the US has attempted to ignore the increasing role of the Iranian-backed Shi’a militias in the Iraqi forces. Tensions in Kirkuk may bring that to a head because Iraq has deployed regular units, such as the 9th Mechanized Division, near Peshmerga positions. US Humvees, which some Shi’a militias have acquired, often fly Shi’a sectarian flags. One photo circulating on social media shows a Humvee adorned with a photo of Ayatollah Khamanei. US-made M1 Abrams tanks are adorned with Shi’a flags as well.Senior US officials, such as National Security Adviser “H.R.” McMaster and Secretary of Defense James Mattis, are familiar with the threat of the militias from their time in Iraq. In addition, CIA Director Mike Pompeo in a speech on October 12 at the University of Texas, harshly criticized the IRGC, according to NBC. “It openly vows to annihilate Israel. And when you look at the death and destruction inflicted in Syria, Yemen and Iraq by Tehran and its proxies, the threat is clear.”Now, on the front lines near Kirkuk, the influence of the Iranian-backed militias and their role in the future of Iraq after the defeat of ISIS has become clearer in the dispute with Kurdistan. US officials who opposed the Kurdistan referendum may have to rethink Iraq policy in the wake of the current crisis and the administration’s new policy on Iran.