(Reuters) - U.S. Secretary of State Rex Tillerson said on Sunday it was time for Iranian-backed militias and their Iranian advisers who helped Iraq defeat Islamic State to "go home" after a rare joint meeting with the leaders of Iraq and Saudi Arabia.
The United States is concerned that Iran, a Shi'ite regional rival, will take advantage of gains against IS there and in Syria to expand the influence it gained after the U.S. invasion in 2003, something Sunni Arab states like Saudi Arabia also oppose.
"Iranian militias that are in Iraq, now that the fight against Daesh and ISIS is coming to a close, those militias need to go home. The foreign fighters in Iraq need to go home and allow the Iraqi people to regain control," Tillerson said at a joint news conference with Saudi foreign minister Adel Jubeir.
Tens of thousands of Iraqis heeded a call to arms in 2014 after IS seized a third of the country's territory, forming the Popular Mobilization Forces (PMF) which receive funding and training from Tehran and have been declared part of the Iraqi security apparatus.
A senior U.S. official said Tillerson had been referring to the PMF and the Quds Force, the foreign paramilitary and espionage arm of the powerful Islamic Revolutionary Guards Corps (IRGC).
Iraq's military, armed by the United States but supported by the PMF, ejected the ultra-hardline Sunni Muslim militant group from Mosul and other cities in northern Iraq this year.
Several thousand U.S. troops are still in the country, mostly for training but also to carry out raids against IS.
The campaign to uproot the militants left whole cities in ruins and has hit Iraq's economy.
A new joint body between Iraq and Saudi Arabia convened an inaugural meeting earlier on Sunday to coordinate their fight against IS and on rebuilding Iraqi territory wrested from the group. Jubeir emphasized historic ties between the two neighbors, which share a border, vast oil resources and many of the same tribes.
"The natural tendency of the two counties and people is to be very close to each other as they have been for centuries. It was interrupted for a number of decades. We're trying now to make up for lost ground," he said.
The rare senior meeting, signalling a thaw between states that have been at loggerheads for decades, was also attended by Saudi King Salman and Iraqi Prime Minister Haider al-Abadi.
"We have launched a program for the future of the region based on development and security rather than the differences and wars that we have suffered," Abadi said.
WINNING THE PEACE
Tillerson said the council would contribute to reforms to build Iraq's private sector and encourage foreign investment. "This will be critical to winning the peace that has been earned through the hard-fought military gains," he said.
The council agreed to reopen a Saudi Basic Industries Corp (SABIC) office in Iraq and grant Saudi agriculture company SALIC an investment licence. A second meeting will be held in Baghdad but no date was mentioned.
Tillerson and Jubeir also discussed Washington's hawkish new policy towards Iran, including a possible withdrawal from the 2015 nuclear deal and new sanctions on the IRGC.
"Both our countries believe those who conduct business with the Iranian Revolutionary Guard, any of their entities, European companies or other companies around the world really do so at great risk," said Tillerson.
Relations between Riyadh and Baghdad have been cut since the former Iraqi President Saddam Hussein invaded Kuwait in 1990. Saudi Arabia, along with the United Arab Emirates, is wooing Baghdad now in an effort to halt the growing regional influence of arch-foe Iran.
Saudi Oil Minister Khalid al-Falih visited Iraq on Saturday to call for increased economic cooperation and praise existing coordination to boost crude oil prices, the first Saudi official to make a public speech in Baghdad for decades.
A commercial Saudi airplane landed in Baghdad last week for the first time in 27 years, and in August the two countries opened a border crossing for trade which had been closed just as long. Tillerson's six-day trip will also take him to Qatar, Pakistan, India and Switzerland.