The competition between the six member states of the Gulf Cooperation Council (GCC), plus usually Iraq and Yemen, is little known outside the region, but hotly contested within it and is next due to be held in late 2014 or early 2015.
The heads of Football Associations agreed unanimously on Tuesday to switch the tournament to the Saudi city of Jeddah, citing incomplete infrastructure and a ban by FIFA on Iraq hosting international matches because of security concerns.
Iraq was also due to host the 2013 tournament, but this was moved to Bahrain instead, and the Iraqi cabinet reacted furiously to the latest snub by withdrawing the country's team.
The Ministry of Youth and Sport said it was "extremely disappointed", denouncing the decision as politically motivated.
"It has become manifestly clear that the reason for moving the (tournament) from Basra to Jeddah is political and taken under intense pressure from Saudi," read a statement from the ministry. "Saudi Arabia and others are conspiring behind closed doors against Iraq and the sports (of Iraq)."
Prime Minister Nuri al-Maliki also weighed in, describing the tournament switch as "prejudiced against the rights of the Iraqi people" in his weekly televised speech on Wednesday.
Should Iraq boycott the tournament at the behest of its government, the national team and domestic clubs could face sanction from FIFA, which takes a dim view of political interference in football matters.
FIFA temporarily banned Cameroon in July for alleged state meddling, warning at the time: "The FIFA statutes oblige member associations to manage their affairs independently and with no influence from third parties."
The animosity between Iraq and Saudi Arabia dates back to 1990, when Saddam Hussein invaded Kuwait, setting off the Gulf War in which an international coalition including Saudi fought to drive Iraq back.
Relations with Kuwait have since improved, but Baghdad accuses Qatar and Saudi Arabia of fomenting unrest among its Sunni minority, and has openly criticised their support for rebels fighting to overthrow Syrian President Bashar al-Assad.
The Shi'ite-led government that came to power after Saddam's overthrow in 2003 has leaned towards Saudi Arabia's main rival, Iran, which is also Assad's staunchest ally in the region. Iraq says its Syria policy is independent and neutral.
FIFA banned Iraq from hosting international matches in 2002, amending this in 2009 to allow some games to be played in northern city of Arbil, although the ban was later reinstated.
In March, FIFA said Iraq could play at home again, but with violence worsening as Sunni Islamist insurgents including al Qaeda regained ground the soccer governing body suspended this permission in July, a FIFA spokesman said.
Basra is relatively safe compared with other parts of the country and Arbil hosted Iraq's first two home qualifiers for the 2014 World Cup. The remaining four were held in Qatar.
"All the (FA) presidents agreed... that the city of Basra was not ready," said Sheikh Ali bin Khalifa Al-Khalifa, President of the Bahrain Football Association, stressing that Iraq's own FA had supported the decision as well.
The next Gulf Cup, scheduled for 2016-17, has been awarded to Iraq, Sheikh Ali said.
FIFA vice president Prince Ali Bin Al-Hussein on Tuesday questioned Iraq's ban on hosting matches and said it was unfair to exclude Iraq while other countries facing similar problems were allowed to play at home.
Iraq's Sports Ministry said it planned to lodge an official complaint and appoint a lawyer to look into lifting the ban.
In the statement, it said Iraq had poured huge sums of money into preparing for the tournament and that Gulf states had agreed in 2007 to hold it in Basra, at a time when the security situation was worse than now.
The Gulf tournament is usually held each two years. The first was in Bahrain 1970.
- Politics & Government
- Saudi Arabia
- Gulf Cooperation Council