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Paraguay almost made a fine start to the match when they forced a save out of Mohammed Hameed after just four minutes, but the Iraq skipper was equal to the effort.
Iraq responded with a number of chances of their own, but Morel in the Paraguay goal was in fine form to keep them at bay.
Both teams created plenty of shooting opportunities in the first half, but neither could find the all-important opening goal before the break.
It was more of the same in the second half as the two sides alternated chances without making the most of them.
Paraguay's hopes of progressing took a turn for the worse 10 minutes from time when Sanabria was given his marching orders for two yellow cards.
The South American side managed to hold on until 90 minutes, but within four minutes of extra time they were behind through a Farhan Shukor strike.
The 10 men of Paraguay could not find an equaliser in the remaining 25 minutes or so as Iraq safely booked their spot in the last eight.