Protesters stormed the Bahraini embassy compound in Baghdad Thursday night, removing the flag from above the building and replacing it with a Palestinian banner in protest against a conference held in the gulf nation to promote peace between Arabs and Israelis.
No one was hurt in the standoff that lasted more than an hour and later in the night Iraqi security forces were in control of the area.
An Iraqi security official said the protesters forced their way in by breaking through the main gate but stayed in the garden without storming the offices inside the compound.
The official, who spoke on condition of anonymity in line with regulations, said security forces opened fire in the air to disperse the protesters and reinforcements were sent to Baghdad's western neighbourhood of Mansour where the embassy is.
More than an hour later, the nearly 200 protesters, waving Iraqi and Palestinian flags, dispersed.
The Bahraini diplomats were evacuated earlier from the compound into the heavily fortified Green Zone after the mission received threats, the official said.
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The two-day workshop in Bahrain that ended Wednesday was to promote the Trump administration's USD 50 billion economic support plan for the Palestinians ahead of a Mideast peace plan, widely known as the Deal of the Century, to be announced later.
Several Arab countries boycotted the Bahrain conference including Lebanon and Iraq as well as the Palestinian authority.
Saudi minister for Gulf affairs Thamer al-Sabhan tweeted that "what is happening now at the Bahraini embassy in Baghdad is very regrettable."
Iraq is home to Iran-backed militias and the embassy attack comes amid tensions between the United States and Iran in the Middle East.
Iraq has close relations with both Washington and Tehran and has been trying to ease tensions between them.
The crisis gripping the Middle East stems from President Donald Trump's withdrawal of the United States a year ago from the nuclear deal between Iran and other world powers and then imposing crippling new sanctions on Tehran.
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