Iraq's win over Syria in a landmark Baghdad tie highlighted the nations' tilting fortunes -- one fitfully emerging from decades of conflict, the other seemingly spiralling into worsening violence.

The thrilling 2-1 win in front of a packed crowd in the 40,000-seater Shaab Stadium came days after world football's governing body lifted a ban on Iraq hosting international matches, and was just the second internationally-sanctioned friendly to be played in the Iraqi capital since the US-led invasion of 2003.

Supporters held up Iraqi flags and chanted, "Sunni, Shiite, brothers!", a reference to the sectarian violence that plagued Iraq during the worst of its bloodshed, and now threatens to spill over from across its western border in Syria.

Iraq took the lead in the 52nd minute with a strike from captain Younis Mahmoud, but Syria equalised in the 80th minute thanks to striker Omar Khribin, setting up a thrilling finish.

Defensive back Ali Rehema netted the winner well into injury time, leaving Syria one last-gasp, ultimately unsuccessful, attempt at a draw.

Security forces imposed tough measures in the area surrounding the stadium, as the friendly marked a key step in Iraq's re-emergence on the world stage, but also because of the opponent, a country that has sparked sharp divisions within Iraq over the course of its bloody two-year uprising.

"The conflict is between oppressed people seeking freedom against the regime," said Raad Sattar, a spectator at the match who was holding an Iraqi flag aloft.

"In the end, the victory will be for the people, because they seek dignity," the 32-year-old taxi driver said.

Despite his strong remarks, the raging conflict in Syria has proved divisive in Iraq.

The rebels, drawn mostly from Syria's Sunni Muslim majority, are fighting to overthrow a regime dominated by President Bashar al-Assad's Alawite minority community, an offshoot of Shiite Islam.

Iraq's Shiite-led government fears that victory for the rebels would embolden insurgents among the Sunni Arab minority that dominated Saddam Hussein's regime and all previous governments in Baghdad.

Those concerns have been fanned by three months of protests in Iraq's Sunni-majority north and west, which border Syria, while diplomats fear that poor communication between the government and protesters could give Sunni militant groups linked to Al-Qaeda room to manoeuvre.

"The alienation of the Sunni population, feeling disenfranchised and embittered, and treated unfairly ... (creates) the perfect situation for Al-Qaeda to exploit," a Western diplomat said, speaking on condition of anonymity.

In public, Iraq has remained scrupulously neutral in the conflict raging in its western neighbour.

But Washington has criticised Baghdad for not cracking down on Iranian flights through its airspace to Syria, that US officials charge are being used to ferry arms.

US Secretary of State John Kerry told reporters after meeting Iraqi Prime Minister Nuri al-Maliki on a surprise trip to Baghdad on Sunday that he "made very clear to the prime minister that the overflights from Iran are in fact helping to sustain President Assad and his regime."

Shiite Iran has remained a steadfast ally of Assad's regime throughout the two-year conflict that the United Nations says has killed more than 70,000 people.