Man of the match Nashat Akram scored one and set up another as Iraq stunned Australia 3-1 at the Rajamangala Stadium on Friday to keep on track for a quarter-final appearance for the fourth successive tournament.
The Al Shabab midfielder, who has been linked with a move to English Premiership side Sunderland, opened the scoring with a 23rd minute free-kick before setting up Hawar Mulla Mohammed on the hour mark after skipper Mark Viduka had equalised for Australia with a header two minutes after the interval.
Australia's miserable night ended when substitute Karrar Jassim scored from close range following a defensive error from Lucas Neill, who was sent off late in the game after picking up a second yellow card for dissent.
Iraq need only a draw in their final Group A game against Oman to advance to the last eight, while the Soceroos, who were considered one of the pre-tournament favourites, must beat co-hosts Thailand to stay alive in the competition.
Iraq coach Jorvan Vieira named an unchanged side from the one that started the 1-1 draw with hosts Thailand while the Brazilian's counterpart Graham Arnold made one alteration from the starting 11 against Oman, as forward Brett Hollman came in for midfielder Mile Sterjovski.
With Group A hosts Thailand defeating Oman 2-0 on Thursday the pressure was on both sides to get the win and it was the Australians, with Hollman supporting skipper Mark Viduka up front, that had the first chance of the match.
Harry Kewell picked up possession on the left flank and swung in a cross towards Mark Bresciano but the Palermo midfielder, who scored in Australia's 2-1 win over Iraq back in March 2005, failed to connect properly with the Liverpool man's third minute pass.
Seven minutes later it was Iraq's turn to attack, with captain Younis Mahmoud skilfully turning Brett Emerton before seeing his powerful shot turned out for a corner by Aussie keeper Mark Schwarzer.
Free-kicks from Bresciano and Hawar Mulla Mohammed were both struck directly at Noor Sabri and Schwarzer respectively before a set-piece gave Iraq a 23rd minute lead.
Vince Grella was penalised for dangerous play after kicking Hawar in the head giving Iraq a free-kick, which was whipped directly into the net by Nashat Akram as Schwarzer was put off by the run of Saleh Sadir who was credited with the goal but didn't appear to get the final touch.
The first-half was punctuated with numerous fouls and after Bresciano was lucky to escape a caution for lashing out while being held back by Bassim Abbas, Viduka shot inches wide following a 31st minute free-kick.
Australia were becoming increasingly frustrated and Vince Grella, who had been needlessly booked in the 35th minute for dissent, was lucky to stay on the pitch after pushing Younis Mahmoud to the ground.
Australia's misery could have been compounded when a howler from Patrick Kisnorbo gave possession to Younis Mahmoud who squared the ball to Saleh Sadir in the penalty box.
But the Al Ansar midfielder was denied a shot at goal following a superb tackle by Luke Wilkshire.
Australia hit back two minutes after the interval when Bresciano fed the ball to Emerton whose cross from the right was headed home by Viduka.
To make matters worse for Iraq, Saleh Sadir had to leave the field before they restarted the match with what looked to be a re-occurrence of a knee injury sustained during the WAFF Championship in July.
Australia were in total control but Iraq regained the lead on the hour mark when the Nashat's sublime pass set Hawar clear on goal and the Al Ain striker deftly flicked the ball past the advancing Schwarzer.
Iraq should have made it three two minutes later when the superb Nashat weaved his way through the Australian rear guard and slipped the ball to Haider Abdull Amer but the defender blazed the ball wastefully over the bar.
Nashat was pulling the creative strings in midfield and started the move that led to Hawar almost beating Schwarzer with the deftest of chips but not for the first time in the tournament the Middlesbrough number one rescued his side, palming the 24-year-old's 75th minute effort onto the crossbar.
Australia's miserable night was complete when Iraq added a third with four minutes from time when Lucas Neill's poor clearance fell to the feet of Younis Mahmoud.
The Iraq skipper's shot came off the heel of the West Ham United defender and into the path of Karrar Jassim, who tapped the ball into an unguarded net.
Neill's personal nightmare didn't end there when he picked up his second yellow card, both of which were for dissent, meaning he will miss out on the Socceroos must-win match against hosts Thailand.