The State Department listed Ahmad al-Hamidawi, secretary general of armed faction Kataib Hezbollah, as a "specially designated global terrorist," freezing any US assets he may hold and making US transactions with him a crime.

The group as a whole, which has a close relationship with Iran, has been designated as a terrorist group by the United States since 2009.

"Today we are intensifying our pressure on this terrorist group," Nathan Sales, the State Department counterterrorism chief, told a news conference.

He charged that the group's goal is to "advance the Iranian regime goal of turning Iraq into a vassal state."

The State Department pointed to Kataib Hezbollah's series of rocket attacks including fire on December 27 against an Iraqi base that houses US troops which killed a US citizen contractor.

The incident sent tensions soaring, with the United States bombing paramilitary targets and eventually killing Iran's most powerful general, Qassem Soleimani, in a drone attack at the Baghdad airport.

The State Department also pointed to indications that the group was behind deadly sniper attacks against demonstrators in October in Baghdad.

Nationwide protests, triggered by economic concerns, brought down a government that had close ties with Iran.

Secretary of State Mike Pompeo on Sunday spoke by telephone with Iraq's designated next prime minister, Mohammad Allawi, and urged the government to protect US forces.

The Soleimani killing led the caretaker government to seek the departure of the US military, a request rejected by President Donald Trump who threatened sanctions if troops are forced out.