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Last week, national security adviser John Bolton announced that the U.S. was deploying one of its aircraft carrier strike groups to the Persian Gulf to protect their forces in the Middle East from an 'imminent' attack by Iran and its proxies.
The U.S. State Department has ordered the pullout of the employees from both the U.S. Embassy in Baghdad and its consulate in Erbil, the embassy said in a statement.
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"Normal visa services at both posts will be temporarily suspended," it said, recommending those affected depart as soon as possible. It was unclear how many staff would leave.
The pullout of its non-emergency personnel from Iraq is a precautionary move in light of what Washington claims is a "credible and possibly imminent attack" by Iranian-backed groups in the Middle Eastern nation.
On Tuesday, the U.S. military reaffirmed concerns about possible imminent threats from Iran to its troops in Iraq, although a senior British commander cast doubt on that and Tehran has called it "psychological warfare."
U.S. President Donald Trump's administration has stepped up sanctions pressure by ending waivers for some countries to purchase Iranian oil - part of efforts to roll back the Islamic Republic's expanding regional clout.
Iraqi Prime Minister Adel Abdul Mahdi said on Tuesday he was getting indications from talks with both the United States and Iran that "things will end well" despite the rhetoric.
Iran released a statement earlier this week saying that they were not seeking war with the United States, nor were they planning to launch any attacks against their forces.
Washington has sent additional military forces to the Middle East, including an aircraft carrier, B-52 bombers and Patriot missiles in a show of force against what U.S. officials have said is a threat to its troops and interests in the region.
A senior Iranian Revolutionary Guards commander has said Tehran would retaliate against any aggressive U.S. moves.
A U.S. State Department spokesman said the decision to withdraw non-emergency staff was based on a security assessment, but would not give details on how many personnel were leaving.
"Ensuring the safety of U.S. government personnel and citizens is our highest priority and we are confident in the Iraqi security services' (ability) to protect us," he said.
"But this threat is serious and we want to reduce the risk of harm."
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