Sunni insurgency, Sunni-Shia sectarian violence, al Qaeda terror - Iraq doesn't need more problems. But it has one that too often gets overlooked: It's quickly becoming the latest battlefield in the proxy war between the Middle East's rising powers, Saudi Arabia and Iran.

The Saudis are (mostly) Sunni Arabs, while the Iranians are (largely) Shiite Persians - and each seeks to dominate the Middle East and lead the Muslim world. Their growing rivalry is a major factor not just in Iraq but also in Lebanon, the Palestinian territories and even Sudan.

• In Lebanon, Saudi Arabia backs the government of Prime Minister Fouad Siniora. Iran backs Shia Hezbollah, which has sought to topple the democratically elected government since the end of the war with Israel last summer.
  
  
• In the Palestinian territories, both Iran and Saudi Arabia are courting Hamas. While Tehran has long supported Hamas against Israel, Riyadh cut in on Hamas' dance card in February by brokering a political agreement between Hamas and Fatah at Mecca.
  
  
• The Saudis recently stepped in to help ink a peace deal between Sudan and neighboring Chad. They won points for preserving peace within Sunni Islam - but also likely hoped to get Khartoum to stop Iran's funding of the conversion of young Sunni Sudanese to Shiism.

But Iraq is the major flashpoint. The Iranian regime seeks two basic things there: 1) An ignominious defeat for America, leading to a U.S. withdrawal - from the region, if possible; and 2) The establishment of a Shia-dominated, pro-Iran Iraqi government.

Tehran has been co-opting Shia politicians and clerics at least since the war began. Firebrand, anti-Amerian cleric Muqtada al Sadr is a good example of one who's increasingly in the Persian's pockets.

But not all Iraqi Shia are sympathetic to Iranian encroachment. There's an ethnic difference (Arab vs. Persian), too, as well as bitter memories from the 1980-88 Iran-Iraq war. And many Iraqi Shia despise the aggressive brand of Shiism pitched by the Iranians.

Yet survival trumps other issues, and Tehran has made gains by providing arms, money and training to the militias that have sometimes seemed the best hope for Iraqi Shia, especially the poor, to resist attacks from Sunni insurgents and al Qaeda suicide bombers.

The Saudis, by contrast, largely back their fellow Sunnis in Iraq - with the important exception of al Qaeda and the insurgents. Above all else, they want to prevent Iraq from falling under Tehran's sway. One big fear is that sectarian strife could flow over Iraq's borders into Saudi Arabia - stirring up trouble with Saudi Arabia's Shia minority.

Riyadh has been none too pleased with U.S. progress in Iraq; recently, it's started taking matters quietly into its own hands. Covert Saudi support has been flowing to places like Anbar, where Sunni tribal forces are being "re-empowered."

Happily, though, that support is bolstering the overall U.S. effort - for the Sunnis of Anbar have been striking back at the strong (and overwhelmingly foreign) al Qaeda presence in the province, rather than fighting Iraqi Shiites.

But the Saudis, unhappy with - and distrustful of - Shia ascendance in Iraq, still refuse to meet with Iraq's Shia Prime Minister, Nouri al-Maliki, despite repeated American requests. They remain an "insurance policy" for their Iraqi co-religionists - a possible counter if the Shia start a new round of sectarian violence or if Iran manages to install a puppet Iraqi government down the line.

Indeed, an adviser to the Saudi government wrote an op-ed last fall that warned of a "massive Saudi intervention to stop Iranian-backed Shia militias from butchering Iraqi Sunnis" if America pulls out of Iraq. (The Saudi government disavowed the piece, but the signal remains.)

There's no love lost in this relationship - the two sides have been foes since the Islamic Republic of Iran emerged after the 1979 revolution.

• In 1987, Iranian pilgrims tried to incite sectarian divisions while on the holy Hajj to Mecca. Saudi security forces killed 402.
  
  
• Iran was fingered in the 1996 Khobar Towers bombing in Saudi Arabia, which killed 19 American servicemen and injured nearly 400.
  
  
• Al Qaeda operatives, who've supposedly been under "house arrest" in Iran since shortly after arriving from Afghanistan in early 2002, are likely behind the terrorist acts in Saudi Arabia that started in 2003.

Naturally, both countries are spending billions on military modernization; the Saudis will spend $60 billion over the next several years. Iran is pursuing nuclear weapons while claiming it's a "peaceful" program; the Saudis are now looking at developing "peaceful" nuclear energy of their own.

Sure, the Saudis and the Iranians have met a few times over tea to make amends recently, but the signs aren't good. The rivalry is most likely only to intensify.

Peter Brookes is a senior fellow at The Heritage Foundation and the author of "A Devil's Triangle: Terrorism, WMD and Rogue States."