The United States declared the Islamic Revolutionary Guard Corps a "terrorist" group on Monday, prompting Tehran to quickly slap US troops with the same designation.

"We tried to stop the American decision. We reached out to all sides, to the US and the Saudis," Abdel Mahdi said during a weekly press conference on Tuesday.

He said he had warned Washington and its ally Riyadh that the move would have "negative repercussions in Iraq and in the region", but stopped short of denouncing it.

Any escalation, he said, "would make us all losers".

The premier has repeatedly said Baghdad would seek good ties with both Tehran and Washington, and the new sanctions have forced it to walk an even tighter rope.

They mark the first time Washington has branded part of a foreign government a terrorist group, meaning anyone who deals with the Revolutionary Guard could face US prison.

The IRGC was integral during Iraq's years of fighting against the Islamic State group, with the head of its foreign wing Major General Qassem Suleimani coordinating fighting across various Iraqi battlefields.

Since the battle against IS ended in late 2017, Suleimani has continued to meet with Iraq's top political brass.

Officially, the IRGC has no presence in Iraq, and it remains unclear whether these sanctions impact Iraqi figures, institutions or military groups.

Washington reimposed tough sanctions on Tehran's energy and finance industries last year, but granted Iraq several temporary waivers to continue importing Iranian gas and electricity to prop up its frail power sector.

At the same time, Iraq and Iran seem to be deepening trade ties, with Iranian President Hassan Rouhani visiting Baghdad in March and Abdel Mahdi returning the visit at the weekend.

The premier has also said he is planning trips soon to both Riyadh and Washington, Tehran's main foes.