A generic name given to local country nationals in Iraq. It is used in a similar way to "Charlie" during the Vietnam war, except that "Steve" does not refer to the political/military leanings of the individual. "Steve" was coined during 2007 by USAF Air Traffic Controllers who desired their own pet-name for the Iraqis that was not at all demeaning. The term has since entered common usage.
If "mop-Steve" mops my shoes one more time I'm going to beat the shit out of him!