On May 15, a convoy transporting two Iranian diplomats was ambushed as it traveled to "a revered Shiite shrine" in the western Baghdad district of Kadimiyah. The two Iranian diplomats and "an Iranian and an Iraqi administrative employee" were wounded in the ambush, the AP reported. Iran's foreign minister accused the United States of staging the attack, but the U.S. military has denied any involvement. The U.S. military also stated four Iranians were wounded in the attack, not three.

The ambush, curiously enough, happened on the same day that Multinational Forces Iraq said it believes the fighting with the Iranian-backed Special Groups has shifted to western Baghdad to deflect attention from Sadr City.

The attack on the Iranians raises questions: were these legitimate diplomats traveling to a Shia Shrine in Kadimiyah, where an uptick of attacks by the Mahdi Army is occurring? Or were these Qods Forces agents using diplomatic cover to mask their movements? Were the Iranians in western Baghdad to help direct attacks by the Mahdi Army and Special Groups against U.S. and Iraqi forces?

The U.S. military has called Iran on using its diplomatic corps as a front for the activity for the Qods Force. In October 2007, General David Petraeus openly accused Iran's Ambassador to Iraq of being a Qods Force officer.

Iran has repeatedly used diplomatic covers for its intelligence agents sent into Iraq. Iran maintains that Mahmud Farhadi, a senior Qods Force officer captured in Sulimaniyah on September 20, was a deputy governor on a diplomatic trade mission to the Kurdish Regional Government. The U.S. military has positively identified Farhadi as the commander of the Zafr Command, one of three units subordinate to the Ramazan Corps, the Qods Force operational command for Iraq.

In January 2007, U.S. forces captured five Qods Force officers in Irbil. The Iranian government still maintains the men were consular officials. The "Irbil Five" are still in U.S. custody.