Iraq was among seven Muslim-majority countries whose nationals were temporarily banned from traveling to the United States in an earlier order issued by President Donald Trump in January, which was blocked by the courts.
The White House had said the earlier ban was needed to prevent would-be terrorists from entering the country. It removed Iraq from the list under pressure from the State Department and the Defense Department, which had noted the close cooperation between the two countries in battling IS militants in the northern Iraqi city of Mosul.
The original order angered many Iraqis, and prompted parliament to call for a reciprocal ban on Americans entering Iraq. Prime Minister Haider al-Abadi declined to impose such a measure.
The revised US travel order is narrower and specifies that a 90-day ban on people from Sudan, Syria, Iran, Libya, Somalia, and Yemen does not apply to those who already have valid visas.
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Thousands of American forces are in Iraqi providing air support and logistical help for a massive operation to drive IS militants from Mosul, the country's second largest city.
Smaller numbers of US special operations forces are embedded with some Iraqi units.
Support from a US-led coalition has been critical in the fight against IS, helping Iraqi forces to slowly roll back the militants over the past two and a half years.
Iraqi troops on the front lines welcomed the revision to the travel ban while still expressing anger over the original order.
"To be honest, (the original ban) made me upset and that will not change," said Sgt. Maj. Asad al-Asadi of Iraq's special forces, who has been away from home battling the IS group for nearly three years. "I've lost three friends fighting terrorists and Trump calls me a terrorist.