The language originated among Jews living in various regions of Iraq.
With the migration of Iraqi Jews to other countries, the language spread to those new locations.
In Israel, the language was widely used among Jews who immigrated from Iraq, and to this day, many Israelis, including those whose parents immigrated from Iraq, continue to use it.
[1] The best known variety is Baghdad Jewish Arabic, although other dialects were spoken in Mosul and elsewhere.
The vast majority of Iraqi Jews have relocated to Israel and switched to Modern Hebrew as their first language.