The Desert Foxes face immediate suspension by FIFA after the Iraqi Government dissolved their football association, thus taking control of the national team's affairs.
FIFA have taken a very firm stance on government interference in the past, and the Iraq team are almost certain to receive an all-inclusive ban that would prevent them from playing any fixtures at all.
The reigning Asian Cup champions have two World Cup qualifiers against Australia scheduled early next month, but they are unlikely to go ahead unless the Iraqi government backs down in the immediate future.
Even if the matches on June 1 and June 7 do take place, the results could be annulled if the issue is not satisfactorily resolved.
A FIFA spokesman confirmed that action will be taken if the Iraqi government ignore the warning letter that was sent to them recently.
He said: "The matter will be dealt with on Tuesday when FIFA's executive committee meets in Sydney, and we understand the urgency of the situation given the qualifiers soon after."