The Campaign Builder's Guild

First of all I should say that this setting idea involves a fictional, fantasy version of the current War on Terror and the ongoing conflict in Afghanistan. I do not intend to offend anyone with it, and I'm sorry if its parallels to real-world catastrophes upsets anyone. However, the idea formed as a kind of cousin to games like Weird Wars and Tour of Darkness, which add supernatural horror elements to real conflicts, both of which are near enough in our history that many of those who experienced the actual tragedy of them are still with us - the Second World War and the Vietnam War, respectively - and as far as I'm aware there has been no mass outcry against either game.

So, that said, basically Cthulhu cultists engineered the war on terror. The radical, militant "Islam" of Al-Qaeda and the Taliban is in fact a front for a far older and more alien evil, and the slaughter of innocents is part of a particularly complex ritual sacrifice designed to cause R'lyeh to rise.
The PCs would be soldiers in Afghanistan, possibly special forces, more likely regular infantry, who in the course of their duties begin to uncover the sanity-shattering secrets of the Cthulhu conspiracy behind the conflict. Also, monsters.
The mystery-within-a-mystery that could come to light towards the end of the campaign arc could be that high-ups in the governments and militaries of the UK, US, and possibly a number of other countries involved, are members of other cells of the same Cthulhu cult responsible for the terrorism, and their troop deployments and decisions are actually helping to further the cultists' ultimate goal - shedding enough blood to raise R'lyeh.

That's the whole idea, I will probably never run the game or expand on this, but it just popped into my head the other day when I was in the shower and I wanted to write it down :)

This reminds me of a Dark Heresy one-shot I was in, where we were tracking down a cult of the Blood God Khorne, and found them trying to summon the horrible Daemons of Chaos, and in attempting to stop them, by shedding their blood, we unwittingly completed their dark ritual.  The big bad daemons appeared and t this point my character (who it turned out was possessed in some way) exploded into a swarm of locusts.  it was crazy.

This could totally work... Lovecraft sometimes drew on the Middle East and Northern Africa as a place where various evil artifacts originated, and he sometimes set stories there (Under the Pyramids, The History of the Necronomicon, anything involving the lost city of Irem, the City of Pillars...).  There are tons of great caves, ruins, forgotten temples etc that would make fantastic locations for horror adventures, and a modern military element would add an air of gritty realism to the whole thing.

As an alternative to the "regular soldiers" thing the PCs could be occult special forces who are already in on things to some extent - they might even have some paranormal abilities (I'm thinking Clive Barker's Jericho except, you know, better).  Or the Occult Ops people could be baddies the PCs encounter at some point.

Steerpike's post triggered something in my head: in may not fit EXACTLY with Cthulu-mythos specifically, but you might consider drawing on some mythology from the region, like ancient Sumerian/Akkadian/Babylonian legends about demons and gods, and maybe work elements into this kind of setting/game. 

If I did ever run this game I'd be hesitant to give the PCs any supernatural powers for much the same reasons that I'd probably make them regular soldiers rather than special forces guys - the supernatural horrors they discover should seem overwhelming compared to what they are able to easily deal with.

That said, the idea of a Jericho-style occult special forces unit as NPCs is a cool one, as the party could either end up seeing them as powerful allies or monsters just as bad as anything nonhuman they'd dealt with. Odds are as well that if such a unit did exist, their orders would come from someone who was in on the cult conspiracy, making them ultimately bad guys even if they and the PCs serve in the same nation's armed forces.

And SH you're absolutely right, there is a huge treasure trove of real-world occult material from the ancient middle east that could be drawn on. Possibly it could serve as a sort of middle layer between the mundane war and the Mythos forces working behind the scenes - the PCs start off finding prayers to Marduk tattooed on their assailants in cuneiform, but sooner or later they start to mention other entities with less pronounceable names...

On a related note, I've always wondered why I've never seen a Call of Cthulhu supplement for the Great War. It's often mentioned as a possible part of characters' backgrounds in Classic Era games, but I've never heard of adventures actually set in wartime. Non-Euclidean trench systems? Maybe the reason the '20s is such a hotbed of Mythos activity is some kind of aftereffect of horrible events during the war, causing some of the nameless evils to stir once more...

For obvious reasons, I did this idea. As far as the characters go, I'd suggest making them "middle of the road", something along the lines of the USMC 1st Reconnaissance Battalion: definitely not special forces, but not quite grunts either, and they definitely get quite a bit of latitude. Plus, if Generation Kill is any indication, they tend to have a pretty cavalier attitude about logistics and supplies, which sounds just perfect for a military horror game.

Another thing I can't stress enough is that if you're trying to run an honest-to-God horror game, mix it up. Don't dwell only on Cthulhu, or think it's necessary to include him at all. There are plenty of other ways to include serious Mythos-themed horror without falling back on Ol' Squid-Face: this may just be me, but I always thought the vaguer, more cosmic deities like Azathoth and Nyarlethotep were a whole lot scarier.

So, how much does this setting draw on the extended Lovecraft/Cthulhu Mythos?   If I look through the monsters or occult tomes section of my Call of Cthulhu rulebook, how much of that is assumed to exist in your conception of the setting?  Like ghouls, deep ones, serpent people, for instance?  The Necronomicon?  The Book of Eibon?  De Vermiis Mysteris?