Paraguay ended Iraq's fairytale Olympic football run with a 3-1 semi-final win. Striker Jose Cardozo netted twice and Fredy Bareiro added a third in the 68th minute before substitute Razzaq Farhan scored a late consolation goal.
Paraguay will face South American rivals Argentina in Saturday's final after they swept past Italy 3-0.
Iraq can still win only the second Olympic medal in their history if they overcome the Italians in the third-place match on Friday.
"For us it is still a great achievement to play for third place and try to to win the bronze medal, taking into account all the difficulties in Iraq," said Iraqi coach Adnan Hamd.
Iraq's only previous Olympic medal was a weightlifting bronze at the 1960 Rome Games.
MMIX
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