The US ambassador to Iraq and members of staff were evacuated from the US embassy in Baghdad on Tuesday before dozens of Kataib Hezbollah supporters broke down the embassy gate and stormed the compound, setting fire to a reception area.
Iraqi security forces fired teargas to disperse the crowd which had gathered to protest US airstrikes in Iraq and Syria on Sunday.
Demonstrators chanting “Death to America,” and burning US flags had marched through security checkpoints into the high security Green Zone.
Security guards earlier retreated inside the embassy because of safety concerns as the protesters smashed security cameras outside.
A correspondent from Jordan-based Al-Hadath reported more than 20,000 people had gathered outside the compound.
Tuesday’s protests came amid anger over US air strikes in Iraq and Syria on Sunday against the Kataib Hezbollah militia, which is backed by the Iranian Revolutionary Guard’s elite al-Quds force.
Led by one of Iraq’s most powerful men, Abu Mahdi al-Muhandis, the militia is part of the Popular Mobilization Units mobilized to fight against the “Islamic State” group.
Sunday’s US strikes targeted an Iran-backed Iraqi militia blamed for a rocket attack that killed an American defense contractor and wounded four US service members, the Pentagon said.
The Kataib Hezbollah militia — a separate force from the Lebanese militant group Hezbollah — vowed on Monday to retaliate for the US strikes that killed 25 of its fighters and wounded dozens of others.
The US retaliation and vows for revenge threatened to unleash a dangerous spiral of escalation and backlash against the US military presence in Iraq at a time the country is politically unstable following nearly three months of deadly anti-government protests.
The US blamed Kataeb Hezbollah for a rocket barrage on Friday that killed an American defense contractor and wounded four US soldiers at the K1 Iraqi military base in Kirkuk in the north of the country. Several Iraqi soldiers were also wounded.