I think the General chose the enslave option, having vacated all the cities except for Syria, Jordan and a few other nearby provinces (keeping governors there for that purpose), sending the Iraqi population out to them. I'm not sure why the population in Iraq is continuing to drop, but my guess is that squalor levels may be pretty high.
BTW, is there a cheat to prevent the population from rioting every turn and destroying the temples and other public order buildings you've recently repaired? It's costing a mint with little noticeable positive effect.
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