A rocket has been fired into Baghdad's heavily fortified Green Zone tonight - where the US Embassy is based.

Iraqi military spokesman Brig Gen Yahya Rasoul said a Katyusha rocket fell near the statue of the Unknown Soldier, less than a mile from the embassy, but it is not known who is responsible.

It comes amid heightened tensions across the Persian Gulf after the White House ordered warships and bombers to the region earlier this month to counter an alleged threat from Iran.

In an outburst following the rocket launch, President Donald Trump threatened Iran with destruction if it seeks a fight with the US.

He tweeted: 'If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!'

The US Embassy in Baghdad (pictured) has ordered all non-essential, non-emergency government staff on Wednesday to leave Iraq immediately amid escalating tensions with Iran. Washington did not publicly provide any evidence to back up claims of an increased threat from Tehran. A rocket was fired today into Baghdad's heavily-fortified Green Zone - where the US Embassy is based

Iraqi military spokesman Brig Gen Yahya Rasoul said a Katyusha rocket (stock pictured) fell near the statue of the Unknown Soldier, less than a mile from the embassy

The US has also moved nonessential staff out of its diplomatic posts in Iraq.

Two Baghdad-based diplomatic sources said they heard the blast close to the compound and reports suggested alert sirens were briefly sounded.

Bill Urban, a spokesman for US Central Command, said in a statement Iraqi Security Forces are investigating Sunday's incident.

A State Department spokesman confirmed 'a low-grade rocket' landed within the International Zone near the US Embassy and there was no significant damage or impact on any US-inhabited facility.

The military is investigating the cause of the blast but said the rocket (stock pictured) was believed to have been fired from east Baghdad

The spokesman said such attacks will not be tolerated and will be responded to 'in a decisive manner'.

They added that the US will hold Iran responsible 'if any such attacks are conducted by its proxy militia forces or elements of such forces'.

Police patrols were originally rushed to the Mohammed al-Qasim highway in eastern Baghdad in search of any suspicious vehicles spotted that may be carrying rocket launchers after they received a tip the rocket had been fired from inside a truck.

They were searching for suspects in the eastern district of New Baghdad, with the area home to Iran-backed Shiite militias, some of whom do not want the US in Iraq.

Police special forces found a rocket launcher in al-Sina'a district in eastern Baghdad and sealed off the area as an ordinance disposal team from the Baghdad Operations Command prepared to inspect it.

The Katyusha multiple rocket launcher is an inexpensive type of rocket artillery that can deliver explosives to a target quicker than conventional artillery, but is less accurate.

The Green Zone is one of the world's most high-security institutional quarters.

Located in the centre of the Iraqi capital, it houses parliament, the prime minister's office, the presidency, other key institutions, top officials' homes and embassies.

The US embassy in Baghdad - the world's largest - lies within the fortified neighbourhood, also known as the International Zone, and is surrounded by concrete walls.

Today's attack is the first since September, when three mortar shells landed in an abandoned lot inside the Green Zone.

Now, amid an escalating conflict between the US and Iran, Iraq is once again vulnerable to becoming caught up in the power play.

An attack targeting US interests in Iraq would be detrimental to the country's recent efforts at recovering and reclaiming its status in the Arab world.

It comes after the US Navy revealed it had conducted exercises in the Arabian Sea over the weekend, with an aircraft carrier strike group ordered to the Persian Gulf to counter an alleged, unspecified threat from Iran.

The amphibious assault ship USS Kearsarge and the Arleigh Burke-class guided-missile destroyer USS Bainbridge sail in formation as part of the USS Abraham Lincoln aircraft carrier strike group in the Arabian Sea on Friday

The Navy said today the exercises and training were conducted with the USS Abraham Lincoln aircraft carrier strike group in coordination with the US Marine Corps, highlighting US 'lethality and agility to respond to threat,' as well as to deter conflict and preserve US strategic interests.

Also taking part in exercises were the Kearsarge Amphibious Ready Group and the 22nd Marine Expeditionary Unit, both deployed to the US Fifth Fleet area of operations in the Persian Gulf.

The Navy said the exercises - on Friday and Saturday - included air-to-air training and steaming in formation and manoeuvring.

The USS Abraham Lincoln sails in the Arabian Sea near the USS Kearsarge. It is part of the US Fifth Fleet which was sent to the region amid an unexplained threat from Iran

The Navy said the exercises - on Friday and Saturday - included air-to-air training and steaming in formation and manoeuvring. Pictured: Aviation Boatswain's Mate 2nd Class Nicholas Hawkins, from Houston, Texas, signals an MV-22 Osprey to land on the flight deck of the Nimitz-class aircraft carrier USS Abraham Lincoln in the Arabian Sea

Iraq hosts more than 5,000 US troops and is home to powerful Iranian-backed militias, some of whom want US forces to leave.

American forces withdrew from Iraq in 2011 but returned in 2014 by invitation to help battle the Islamic State group after it seized vast areas in the north and west of the country, including Mosul.

A US-led coalition provided crucial air support as Iraqi forces regrouped and drove IS out in a costly three-year campaign.

Iranian-backed militias fought alongside US-backed Iraqi troops against IS, gaining influence and power.

On May 8, US Secretary of State Mike Pompeo made a previously unannounced trip to the Iraqi capital following the abrupt cancellation of a visit to Germany.

He told Iraqi intelligence the US had been picking up information that Iran is threatening American interests in the Middle East, although he offered no details according to two Iraqi officials.

Since then, both Iran and the US said they do not want to go to war, but Saudi Arabia has said it will not hesitate to defend itself against Iran if tensions boil over into conflict.

The kingdom said it was ready to respond with 'all strength' following last week's attacks on Saudi oil assets, telling Iran that the ball was now in its court.

Saudi King Salman called for urgent meetings of the regional Gulf Cooperation Council and the Arab League to discuss the escalating tensions.

Saudi King Salman, pictured, has invited Gulf leaders and Arab states to emergency summits in Mecca amid escalating tensions in the region