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Billion-dollar trade pacts have emerged between Tehran and Baghdad, and Iran has opened at least two banks in Iraq that are blacklisted by the United States.

Religious ties also have been renewed, with thousands of Iranian pilgrims visiting holy Shiite sites in Iraq daily, including in Najaf, where Iranian rials are as common a currency as Iraqi dinars, and Farsi is easily understood.

Increasing Shiite sway

The posters may reflect a push among some Shiite groups for a clerical system similar to Iran‘s.

Tehran is widely believed to be lobbying for a member of its ruling theocracy, Grand Ayatollah Mahmoud Hashemi Shahroudi, to succeed Iraq’s 81-year-old Shiite spiritual leader, Grand Ayatollah Ali al-Sistani.

Ayatollah al-Sistani opposes a formal political role for Iraq’s religious establishment, while Ayatollah Shahroudi is part of Iran’s system of “velayat-e-faqih,” or rule by Islamic clerics.

Iraq’s Sunnis and Kurds, however, have no taste for blurring Shiite politics and religion.

Since the ouster of Saddam’s Sunni-dominated regime, political leaders in Iraq have sought to rebuild and strengthen relations with Iran, which has responded in kind.

Many of Iraq’s Shiites sought sanctuary in Iran during Saddam’s reign, and some now hold key government posts.

Tehran has not been shy about wielding its influence. It was at Iran’s urging that hard-line Shiite cleric Muqtada al-Sadr grudgingly threw his political support behind longtime foe Nouri al-Maliki, allowing him to remain prime minister in 2010 after falling short in national elections.

In return, Mr. Maliki last year all but ignored Iranian military incursions on Kurdish lands in northern Iraq.

The government also has delayed, and in Mr. al-Sadr’s case, quashed, arrest warrants on militants backed by Iranian forces and financiers.

Still, even some Iraqi Shiites, such as the cleric, Mr. al-Sadr, and the cafe owner, Mr. Salman, advocate retaining strong Iraqi nationalism and their Arab identity instead of becoming a Persian outpost.

Iraqi government spokesman Ali al-Dabbagh condemned the Khamenei posters, and said they could add to the already-strained political unrest in the country.

But he said the federal government is powerless to remove them.

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