Former Manchester United midfielder Iqbal, who currently plays his club football for Utrecht, netted with 14 minutes remaining after coming off the bench at the start of the second half for Graham Arnold's team.

The result means Iraq will face Saudi Arabia on Wednesday (AEDT), with the winner of the tie qualifying for the FIFA World Cup while the runner-up will advance to another round of preliminaries.

Indonesia, meanwhile, has been eliminated after two losses.

"We knew it would be a tough game with the temperature and everything but this 1-0 victory will give us a lot of confidence," Iqbal said. "It will be a tough game against Saudi Arabia but hopefully we will win."

Indonesia had looked the more likely to pick up the victory needed to keep its own FIFA World Cup dream alive.

Kevin Diks glanced his early header wide of the Iraq goal and Thom Haye was narrowly off target with a strike from distance soon after as the Indonesians made a bright start.

Mauro Zijlstra was denied his first international goal by a last-ditch tackle by Manaf Younis, the Iraq defender snuffing out the opportunity at close range as the 20-year-old forward latched onto Haye's pass into the six-yard box.

Sherko Karim's header that flew over the bar in the 29th minute was as close as Iraq came to troubling Indonesia goalkeeper Maarten Paes with Kluivert's side controlling the opening 45 minutes without reward.

A mistake by Rizky Ridho was to cost the Indonesians, however, as the defender gifted Iraq possession and the ball eventually ended up at the feet of Iqbal, who slotted a perfect finish into the bottom corner from the edge of the area.

Tempers flared as the final whistle approached, with Indonesia captain Jay Idzes acting as peacemaker when his side's fans pelted the pitch with water bottles in disgust at a disputed decision by Chinese referee Ma Ning.

Zaid Tahseen was sent off for a second yellow card nine minutes into stoppage-time but Iraq held on to maintain hopes of joining Japan, Korea Republic, Arnold's native Australia, Iran, Uzbekistan and Jordan as Asia's representatives at next year's finals.