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Iraq Army Kills Militants as Maliki Battles to Halt Advances

June 15 (Bloomberg) -- Iraq’s armed forces attacked positions held by Sunni Muslim militants to try to halt their advance, as Prime Minister Nouri al-Maliki deployed the air force to defend his Shiite-led government.

The army killed more than 279 “terrorists” with the Islamic State in Iraq and the Levant and destroyed 50 of the group’s vehicles in the past 24 hours, army spokesman Qassim Ata said in a televised news conference today. “The security situation is improving” and government forces are conducting pre-emptive operations in Baghdad, which is under their control, he said.

The government is seeking to regain territory held by the breakaway al-Qaeda group, whose advance put in doubt al-Maliki’s rule over a unified Iraq, as OPEC’s second-largest oil producer slides toward civil war. Three years after the U.S. withdrew forces from Iraq, army forces melted away in the face of ISIL militants, who captured the northern city of Mosul last week.

Tariq Al-Hashimi, a Sunni leader accused by Maliki of being involved in terrorism, called for the premier’s overthrow and said Iranian forces have entered Iraqi territory to defend the Shiite-led government.

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“The mess in Iraq, all of this security chaos, I fully blame Iran for,” he said in an interview on on Al Arabiya television. Iranian President Hassan Rouhani said yesterday that while his country was willing to help Maliki, the Iraqi government hadn’t made an official request for aid.

Regional stock markets fell today as escalating violence in Iraq rattled markets in the region. The DFM General Index plunged 4.7 percent to 4,609.28, the lowest close since April 6, while Abu Dhabi’s ADX General Index slumped 2 percent. Qatar’s QE Index and Saudi Arabia’s Tadawul All Share Index both declined.

The violence is pushing the country deeper into another of round of sectarian conflict. Shiite religious leaders have called for citizens to take up arms against the “terrorists.” Al-Maliki called on citizens to be ready to “shoulder the burden” and join the fight against ISIL.

In what underscores the ever-more sectarian nature of the conflict in Iraq, jihadist forums and social media sites were filled with claims that militants had executed 1,700 people they described as apostates.

U.S. Invasion

The claims, which couldn’t be independently verified, were accompanied by photos of the purported mass shootings carried out by ISIL militants. The photos recalled some of the footage from the civil war in Syria, where about 160,000 people have been killed, many of the civilians.

The U.S. invasion of Iraq in 2003, and the subsequent rise to power by the Shiite-Muslim majority, alienated their Sunni counterparts, who dominated the country during Saddam Hussein’s era. Shiite Muslims have political and religious ties to Iran, while their Sunni counterparts have felt marginalized from the country’s political process under al-Maliki.

The Sunni Muslims are a majority in the Anbar Province to the east and in areas to the north of Baghdad. The Shiite are the majority in the south.

Fighting hasn’t spread to the south, which is where 60 percent of the country’s crude reserves reside, according to the U.S. Energy Information Administration. Iraq produced 3.3 million barrels a day in May, according to data compiled by Bloomberg.

Oil Exports

“The immediate impact on Iraq’s crude oil exports is limited for now as the conflict in northern and western Iraq is far from the southern –- and Shiite-controlled –- oilfields and export terminals from where all current oil exports originate,” Goldman Sachs Group Inc. analysts Damien Courvalin, Anamaria Pieschacon and Jeffrey Currie said in report received by e-mail today and dated June 13.

The U.S. has dispatched an aircraft carrier to the Persian Gulf as President Barack Obama weighs options to help Maliki repel ISIL attacks. The U.S. withdrew its forces from Iraq in 2011.

Intervention by global powers in Iraq “will be difficult, but it’s better than the alternative,” former British Prime Minister Tony Blair, a key member of the U.S.-led coalition that invaded Iraq in 2003, said in an interview on BBC’s “Andrew Marr Show” today.

“We have to engage -- and that doesn’t mean, by the way, engagement as in Iraq or Afghanistan, and ground troops -- but it does mean that we actively try and shape this situation,” Blair said.

The carrier USS George H.W. Bush, which has been in the North Arabian Sea, will provide “additional flexibility should military options be required to protect American lives, citizens and interests in Iraq,” the Pentagon said yesterday in announcing its deployment. It was accompanied by the guided- missile cruiser USS Philippine Sea and the guided-missile destroyer USS Truxtun, said the Pentagon press secretary, Rear Admiral John Kirby.

To contact the reporters on this story: Nayla Razzouk in Dubai at nrazzouk2@bloomberg.net; Glen Carey in Riyadh at gcarey8@bloomberg.net; Mahmoud Habboush in Abu Dhabi at mhabboush@bloomberg.net To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net Amy Teibel, Mike Harrison

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