(Bloomberg) -- Iraq severed diplomatic ties with Sweden and suspended the license of Ericsson AB, as a row over perceived anti-Muslim demonstrations in Stockholm intensifies.

Baghdad also ordered Sweden’s envoy to leave the Middle Eastern country.

The move came hours after protesters stormed and set fire to the Swedish embassy in Baghdad. They said they were responding to an upcoming demonstration in Stockholm that was expected to include the burning of a Koran, the holy book of Islam. Many carried banners supporting Iran, which has plenty of influence over Iraq.

Sweden said all staff in Baghdad were safe. Iraq’s foreign ministry condemned the incident. Sweden said it was “completely unacceptable,” while the US also spoke out against it.

Iraqi security forces dispersed the protesters as firefighters put out the blaze. The embassy is located near the fortified Green Zone in Baghdad that houses government ministries and other diplomatic missions.

In Sweden, local media reported that a protester in Stockholm stomped on a Koran rather than burnt it. He was escorted away by police shortly after 2 p.m. local time.

Sweden’s government has criticized burnings of the Koran. Police have repeatedly denied permits for demonstrations involving the desecration of the book in recent months, citing national security concerns. But their decisions have been overturned by courts ruling that freedom of speech must be prioritized unless there is an immediate threat to public safety.

The demonstrations are affecting Sweden’s relations with other Muslim countries. Turkey took months before accepting the country’s entry into NATO, partly because of such protests, and has yet to ratify the accession.

Violent protests against Koran burnings have occurred in the Middle East and beyond in recent years. Last year, they erupted in several countries, including Iraq, after a copy was set alight in Sweden and another was torn in the Netherlands.

Ericsson and the Swedish government didn’t immediately respond to requests for comment from Bloomberg.

--With assistance from Charles Daly and Kati Pohjanpalo.

(Updates with Iraq cutting diplomatic ties.)

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