Quan Van Chuan (green) moments before his foul on Nihad (white) that led to the controversial penalty against Vietnam. (Photo: AFP) The defeat marked the second consecutive time the team could not progress further than the quarters, and also means that Vietnam cannot qualify for the 2024 Olympics football tournament in Paris.
A penalty from Ali Jasim was enough to grant Iraq the victory, despite the controversial nature of the call.
Coach Hoang Anh Tuan brought out his best squad after resting key players in the match against Uzbekistan. Bui Vi Hao was given his first start after outstanding performances in the first two matches.
The first half started slow as both sides wanted to probe their opponent. Iraq, the favourites, were obviously on the front foot, holding on to more than 70% of possession.
The most dangerous moment for Vietnam came in the 17th minute, when a bad clearance from Khuat Van Khang found Al Mosawe inside the box, who fired a powerful shot that forced out a save from Quan Van Chuan.
Five minutes later, Hussein Amer rattled Vietnam's crossbar from a set piece, but he was deemed offside by the referee.
Vietnam had their fair share of chances late in the first half, but both Nguyen Van Truong and Nguyen Van Tung skyrocketed the ball over the bar and the first half ended goalless.
Iraq turned up the pace in the after the break, and created more opportunities near Van Chuan's goal. Ali Al Mosawe's cross in the 52nd minute could have turned into a goal, had it not been for Van Chuan's quick reflexes.
But just ten minutes later, Chuan turned from hero to zero as Vietnam conceded a penalty, after the Korean referee consulted VAR.
Replays showed that Chuan's hands slightly tapped on Nihad Mohammed's shoulders, but the contact was not enough for Iraq's No.10 to fall down. However, the referee still insisted on giving Iraq the penalty in a harsh call for Vietnam.
From the spot, Ali Jasim successfully dispatched his kick, opening the scoring for Iraq.
Vietnam with nothing to lose pushed forward looking for the goal, but the Iraqi defence was tight and Tuan's men could not find an opening.
The men in red encountered more problems when Nguyen Manh Hung was sent off in the first minute of added time, after VAR found the defender went for Jasim's legs near the corner flag.
VAR intervened once more in the thirteen minutes of added time, after referee Ko Hyung-jin pointed to the spot when Ridha Fadhil went down inside Vietnam's six yard box.
However, Fadhil was offside in the build-up and the penalty was cancelled. But two minutes were not enough for an exhausted Vietnam to find the equaliser and the match ended 0-1 to Iraq.
"I think that the team played well, but me and my defence did not cooperate well and that led to the penalty," said keeper and captain Quan Van Chuan.
"I am very sad because a goal would have given us a chance to make the Olympics but we could not find do it."
Coach Tuan expressed his regret that the match was decided by the penalty, but noted that he was happy of his team's performance.
"I cannot say that the penalty was right or not - that is the referee's story," said Tuan.
"The match is over.
"I said earlier on that (if Vietnam lose), I am happy that Iraq progresses into the semis, and if we progress that would be wonderful. Football is football and after the match, we are friends again.
"I wish that the relationship of both teams and both fans of Iraq and Vietnam to be better in the future."
The Vietnam U23 players will return home and prepare for the next round of the National Cup and the crucial stages of the V-League.
The next time a Vietnam national team play will be in June with the last two World Cup qualifiers against Philippines and Iraq, as Vietnam looks for a miracle to qualify to progress.
The identity of the next national team coach will be announced soon, with media speculation leaning towards the appointment of a foreign coach, not a Vietnamese./.
VNA
