NO ONE HATES JUST MEXICANS:

Irked by Iraq's close ties to neighbouring Iran, Washington has begun following through on threats to squeeze Baghdad's fragile economy with delays to crucial cash deliveries and shortened sanctions waivers.

This week, the US granted Iraq last-minute leave to import Iranian gas for its crippled power grids, despite American sanctions on Tehran.

But Washington's patience seems to be running out - the latest waiver was reduced from the usual 90 or 120 days to just 45.

"This is the beginning of death by a thousand cuts," warned financial analyst Ahmed Tabaqchali, of the Iraq-based Institute of Regional and International Studies.

"The shorter the waiver, the more we can't afford for things to go wrong in that time."

Iraq is at a crucial crossroads. Its new premier is struggling to form a cabinet, anti-government protests are filling the streets and skyrocketing tensions between its two main allies, Tehran and Washington, have already spilt blood on its territory.

While Iran enjoys tremendous political and military sway in Iraq, the US still holds a major trump card - the economy.

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