The Trump administration is reportedly considering the termination of military aid to a crucial Middle East ally that played a significant role in the United States’ campaign against the Islamic State group (IS). This ally, which has been under intense attacks from Iran, is now at risk of losing critical support. According to four sources with knowledge of the matter, the US Department of Defense has informed leaders of Iraq’s semiautonomous Kurdistan region that it does not plan to renew an expiring agreement providing security assistance to the Peshmerga, the Kurdish security forces.

Wartabrita.com spoke to two officials who participated in these discussions and two other sources with direct knowledge of the issue. The sources requested anonymity as they discussed details that had not been previously reported.

Kurdish officials are concerned that cutting this funding could create a power vacuum and embolden Iran, which has launched hundreds of missiles and drones into Iraqi Kurdistan since President Donald Trump initiated the conflict with Tehran. Analysts suggest that ending the Peshmerga’s security assistance would undermine a long-standing partner in Iraq and send a message that the US cannot be relied upon to support its allies in the region.

“The US would be cutting off the Kurds, who shed so much blood to help the Americans achieve their goals in Iraq and the wider Middle East,” said Yerevan Saeed, director of the Global Kurdish Initiative for Peace at American University. “This is going to be a big win for Iran, China, and Russia if the Kurds are left so exposed.”

In his second term, Trump has pledged to reduce America’s foreign entanglements in regions like the Middle East. He also initiated the war with Iran, which has now reached the six-month mark with no end in sight. The memorandum of understanding between the Pentagon and the Kurdish Regional Government (KRG) is set to expire on 30 September, the same day the US and other nations are withdrawing their last remaining troops from Iraq.

The troop withdrawal will formally end the international military campaign against IS, in which the Peshmerga fought alongside coalition troops to end the jihadist group’s control of parts of Iraq and Syria. The sole remaining US military base in the country, located in the Iraqi Kurdish capital of Irbil, is set to close next month once coalition troops leave.

The Peshmerga, which has approximately 180,000 troops in Iraqi Kurdistan, received $61 million in fiscal year 2026 for weapons, military training, and stipends through the Pentagon’s counter-IS programme. The Pentagon proposed cutting all the group’s security aid in its fiscal year 2027 budget request—arguing that since IS was defeated the money should now be reallocated—but the spending plan is on hold amid a broader budget battle in Congress.

The request raised alarm bells in Iraqi Kurdistan, but officials had held out hope that the US would renew the funding through an extension of the deal set to expire in September. The fears have only grown as Iran has stepped up attacks against the KRG. Iran and Iranian-backed militias had conducted 158 missile or drone attacks inside Iraqi Kurdistan by late May, according to research compiled by the Foundation for Defense of Democracies, a Washington DC think tank.

But despite the surge in attacks, in recent talks with Iraqi and Kurdish leaders, defense department officials said the US was not planning to extend the memorandum of understanding, multiple sources with knowledge of the discussions said. The Pentagon signed the initial memorandum of understanding giving military assistance to the Peshmerga in 2016, and renewed it in 2022.

A final decision on security engagement between the US and Kurdistan is still being reviewed, according to one source familiar with the Pentagon’s thinking. The US is considering ways to maintain some security support in both Iraq and Iraqi Kurdistan after the troop withdrawal, the sources said.

Both the KRG and US State Department declined to comment.

In response to questions about security assistance for the Peshmerga, a Pentagon spokesperson referred to a statement by the department summarising Defence Secretary Pete Hegseth’s meeting with Iraqi Prime Minister Ali al-Zaidi in July.

“The United States, Iraq, and Coalition partners have achieved tremendous success in defeating ISIS and now the Iraqi Security Forces, including the Peshmerga and other Iraqi Kurdistan Region security forces, will lead the fight against terrorists in Iraq,” the statement said.

The expiration of the security aid for the Peshmerga would come less than one year after the US opened its largest consulate in the world, in Irbil. At the ribbon-cutting ceremony for the $800 million complex last December, Michael Rigas, a senior State Department official, said the consulate was “a testament to the value of the relationship between the United States and the Iraqi Kurdistan Region.”

The recent discussions around Kurdish security were part of larger conversations between the US, the Iraqi government, and KRG over the upcoming troop withdrawal. That date was set under a 2024 agreement between Washington and Baghdad to withdraw the US troops that remain in Iraq from the campaign against IS. American combat troops left Iraq in 2011 but returned after the power vacuum led to the rise of IS in 2014.

The US could avoid repeating the same mistake by continuing to back the Peshmerga, said James Jeffrey, who spearheaded the global coalition against IS in Trump’s first term.

“It’s money well spent, as we found out when the Islamic State rolled into northern Iraq,” said Jeffrey, a former US ambassador to Iraq and Turkey in the Obama administration.