Israeli law prohibits trade with the enemy countries, whether with any entity in the enemy country or indirect trade with the country. The scope of the prohibition is very broad and includes any kind of economic activity with the enemy or to the enemy's advantage, without any exception. As to Iraq there is a general authorization signed by the Minister of Finance which provides a temporary permit for economic activity with Iraq as if not an enemy. This authorization was extended and will be in force until December 31, 2016.
Thus, the ban on trade with enemy countries, currently applies to only three countries: Iran, Syria and Lebanon.