France's top diplomat Jean-Yves Le Drian met with a leading Shiite cleric in Iraq's Najaf on Tuesday, the first time a French foreign minister has visited the holy city.

The visit to the revered southern city capped Le Drian's packed two-day trip to Iraq, during which he announced new support for the country's reconstruction efforts.

France would issue a new one-billion-euro ($1.1 billion) loan over the next four years to help Iraq rebuild after the gruelling fight against the Islamic State group, he said.

"French businesses are absolutely available to contribute to Iraq's reconstruction," Le Drian said.

Iraq's economy was ravaged after IS seized swathes of the country in 2014, prompting many foreign firms to pull out.

Paris granted Baghdad a 430-million-euro ($512-million) loan in 2017 to help implement reforms and improve public services, whose dire state sparked protests last summer.

Le Drian landed in Baghdad on Monday, where he met with Prime Minister Adel Abdel-Mahdi and President Barham Saleh before travelling to the Iraqi Kurdish regional capital Arbil.

There, he cautioned that while IS had lost territory in neighbouring Syria, there were still risks that it could "re-emerge."

French troops are deployed alongside US special operations forces in northeast Syria, where they have backed Kurdish forces in the fight against IS.

Last month, US President Donald Trump announced he would withdraw American troops from Syria, but France has signalled it will stay.

Le Drian travelled to Najaf on Tuesday afternoon, where he visited the tomb of Imam Ali, son-in-law of the Prophet Mohammed and a founding figure of Shiite Islam.

He also met with Ayatollah Mohammad Said al-Hakim, one of Iraq's top four Shiite clerics, chief of them Grand Ayatollah Ali Sistani.

The Najaf clerics' Friday sermons influence everything from daily life to political alliances in Iraq.

In 2014, Sistani's call for Iraqi citizens to take up arms against IS birthed the powerful Hashed al-Shaabi paramilitary force.

Iraq has witnessed a revolving door of diplomatic visits since Trump made a surprise Christmas trip in December.

US Secretary of State Mike Pompeo made a surprise stop in Baghdad on his regional tour last week, followed by Iran's oil minister then top diplomat Mohammad Javad Zarif, who arrived Sunday.

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