Nashat Akram broke the deadlock in the 22nd minute and Hawar Mulla doubled the lead in the 62nd minute before Karrar Jassim secured the victory four minutes from time.

Mark Viduka scored the Socceroos' consolation goal in the 46th minute to leave the tournament favourites in danger of an embarrassing early exit.

Elsewhere, United Arab Emirates are now out of the competition after conceding their second defeat in the competition.

Japan beat them 3-1 thanks to a double from Naohiro Takahara (22, 27) and Shunsuke Nakamura's spot kick in the 41st minute.

Saied Al-Kaas pulled one back in the 66th minute to end the game on a very disappointing result for the Gulf Cup winners who will pack their bags very early.