During the reign of Caliph 'Ali, the seat of administration moved from the city of al-Madīnah to the city of Kūfah. Kūfah was a newly founded city in Iraq, which had a strategic location for trade and military purposes. It was closer to the Persian Sassanid Empire, which was a major enemy of the Islamic Caliphate at the time. Kūfah was also a place where many supporters of Caliph 'Ali had settled, making it a natural choice for him to establish his capital there. The move to Kūfah represented a shift in power from the traditional base of the Islamic Caliphate in the Arabian Peninsula to the newly expanding regions of Iraq and Persia.