Iran-aligned Iraqi armed group Kataib Hezbollah has announced the suspension of all its military operations against US troops in the region, in a decision aimed at preventing "embarrassment" of the Iraqi government.
"As we announce the suspension of military and security operations against the occupation forces - in order to prevent embarrassment of the Iraqi government - we will continue to defend our people in Gaza in other ways," Kataib Hezbollah Secretary-General Abu Hussein al-Hamidawi said in a statement on Tuesday.
Three US troops were killed in a drone attack near the Jordan-Syria border on Sunday that the Pentagon said bore the "footprints" of Kataib Hezbollah, though a final assessment had not yet been made.
A Pentagon spokesperson declined to comment on the group's statement, adding: "Actions speak louder than words."
The United States has vowed to respond to the attack.
US President Joe Biden said he has made up his mind on how to respond to the attack.
Biden, speaking to reporters as he left the White House on a campaign trip to Florida, did not elaborate on his decision, which came after consultations with top advisers at the White House.
He said the US does not need a wider war in the Middle East, echoing comments from other officials on Tuesday that the United States does not want a war with Iran.
Biden has been weighing his options and the expectation has been that there will be retaliatory strikes but the timing of the response has been unclear.
"I don't think we need a wider war in the Middle East. That's not what I'm looking for," he said.
Biden replied "Yes" when asked if he had decided how to respond to the attacks.
Asked if Iran was responsible, Biden added: "I do hold .... them responsible in the sense that they're supplying the weapons" to those who carried out the attacks.
Iran-aligned groups, known collectively as the "Axis of Reistance", have been waging attacks against Israeli and US targets from Lebanon, Yemen, Iraq and Syria, since their Palestinian ally Hamas and Israel went to war on October 7.
Kataib Hezbollah is the most powerful faction in the Islamic Resistance in Iraq, an umbrella group of hardline Shi'ite armed factions that have claimed more than 150 attacks on US forces in Iraq and Syria since the Gaza war began.
The US has responded with deadly strikes in a cycle of escalating violence that Iraqi officials said threatened to undo progress towards stabilising the country after decades of conflict.
Kataib Hezbollah's decision followed days of intensive efforts by Iraq's prime minister to prevent a new escalation after the Jordan attack, his foreign affairs adviser Farhad Alaadin said.
"Prime Minister Mohammed Shia Al-Sudani has been hard at work in the past few days, engaging with all relevant parties inside and outside Iraq," Alaadin said in an interview.
"All sides need to support the efforts of the Prime Minister to prevent any possible escalation," he added.
In its statement, Kataib Hezbollah also said there were disagreements with allies over its attacks, singling out Iran.
It said counterparts in the Axeis of Resistance "often object to the pressure and escalation against the American occupation forces in Iraq and Syria," the statement said.
Iran has denied involvement in attacks by Iraqi groups.
Founded in the aftermath of the 2003 US-led invasion of Iraq, Kataib Hezbollah is one of the elite Iraqi armed factions closest to Iran.
Iraq's government is backed by parties and armed groups close to Iran, though not directly by the hardline groups that have been firing on US forces, Western and Iraqi officials say.
Baghdad has condemned the attacks while also saying regional escalation would continue as long as the Gaza war went on.
