Ferrari's Fernando Alonso finished runner-up, just 0.8 seconds behind the Finn, after a nail-biting final few laps to close the gap between him and Vettel to 10 points with two races remaining.
On an afternoon with a huge crash, two safety car interludes and a string of retirements including McLaren's Lewis Hamilton while leading from pole position, the floodlit Yas Marina circuit hosted one of the sport's great races and kept the stewards busy.
The victory was Raikkonen's first since 2009 when the 2007 world champion won in Belgium, the 19th of his career, and made him the eighth different driver to triumph in 18 races so far this season.
Vettel, who started from the pit lane and set the fastest lap of the race, now has 255 points to Alonso's 245 and can clinch a third successive title in Austin, Texas, in two weeks if results go his way.
"It was an unbelievable day for Sebastian today," said Red Bull team principal Christian Horner after Vettel also had to pit for a new front wing in the early stages. Red Bull could have clinched the constructors' championship for the third year in a row on Sunday but were made to wait after Australian Mark Webber crashed out.
They now have 422 points to Ferrari's 340 with 86 remaining to be won. Vettel and Alonso are the only drivers still in contention for the title, with Raikkonen third overall but 57 behind Red Bull's 25-year-old German.
Raikkonen, a man who has always done his talking on the track, swigged from his bottle of champagne on the podium as others sprayed theirs at him. Asked on the podium by retired McLaren team mate David Coulthard what it was like to win again, the 33-year-old Finn replied in the deadpan fashion his myriad fans have come to love: "Not much really.
"Last time you guys were giving me grief because I didn't smile enough but I'm happy for the team. It's been a hard season and not easy times lately," he added.
"Hopefully this will give everyone belief and turn the tables so we can win more races, if not this year then next year." Raikkonen, who had signed a contract extension before arriving in Abu Dhabi, had seized second place at the start and inherited the lead after Hamilton slowed and pulled over after 20 of the 55 laps.
When the team advised him of his lead, the Finn was typically blunt: "Leave me alone, I know what to do," he told his engineer. "Yes, yes, yes, I do it all the time," he added later on when they reminded him to warm the tyres.
The win was the first since 1987 by a car racing under the Lotus name, although the new Lotus is effectively the old championship-winning Renault outfit that Alonso took his two titles with.
Vettel, who started from the pit lane after being demoted from third place on the grid due to a fuel infringement in qualifying, was 14th by the end of the sixth lap. The safety car then bunched up the field after being deployed on the ninth lap following a dramatic flying smash when Germany's Nico Rosberg piled into the back of Indian Narain Karthikeyan's slowing HRT.
Rosberg's Mercedes was pitched into the air and over the Indian before plunging backwards into the safety barriers. Both drivers walked away unhurt but the impact left considerable debris strewed across the track.
The second safety car period was after a multi-car collision that ended Webber's race along with that of Raikkonen's French team mate Romain Grosjean.
McLaren's Jenson Button was fourth ahead of Venezuelan Pastor Maldonado for Williams.
Japan's Kamui Kobayashi took sixth for Sauber with Brazilian Felipe Massa seventh for Ferrari and Bruno Senna eighth for Williams.
Britain's Paul Di Resta took ninth and Australian Daniel Ricciardo bagged the final point for Toro Rosso. – Reuters