Video emerged of Iranian chief justice, Ebrahim Raisi, being given a huge reception in Baghdad, where he was flanked by Falih Al Fayyadh, leader of the Popular Mobilisation Forces.
Mr Raisi and Mr Al Fayyadh, who is accused of human rights abuses, face sanctions imposed on them by the US.
Jason Brodsky, policy director at United Against Nuclear Iran, said the video was “important optics” for Iranian politics.
The Trump administration blacklisted senior Iranian leaders in Iraq's Popular Mobilisation Forces, an umbrella group composed mainly of Iran-backed Shiite militias.
The US Treasury Department imposed sanctions on the group's chairman, Mr Al Fayyadh, accusing him of human rights offences for his role in quelling protests in Iraq with the support of Iran’s Quds Force, the foreign operations branch of the Islamic Revolutionary Guard Corps.
He was part of a “crisis cell” formed in late 2019 to suppress the protests, the US said.
“By directing and supervising the murder of peaceful Iraqi demonstrators, Iran-aligned militants and politicians such as Falih Al Fayyadh have been waging a violent campaign against Iraqi democracy and civil society,” said former Treasury secretary Steve Mnuchin.
The film shows Mr Raisi touring the site where the US assassinated top Iranian commander Qassem Suleimani and Iran-aligned PMF leader Abu Mahdi Al Muhandis at Baghdad airport in January 2020.
The US State Department also listed Abd Al Aziz Malluh Mirjirash, the Popular Mobilisation Forces chief of staff and Iran-allied militia leader, as a “specially designated global terrorist” for his role in undermining security in Iraq.
In the final weeks of Donald Trump’s presidency, the US announced new sanctions against Iran’s national oil and tanker companies, which will probably make it harder for President Joe Biden to return to the nuclear deal.