Iran says Iraq has expressed regret over comments from one of its ministers accusing Tehran of arming Shia militia groups in the holy city of Najaf.
Shia militias were at the heart of the row between Iran and Iraq
Foreign Minister Kamal Kharrazi said he had been reassured that the comments by Hazim al-Shalaan did not represent an official view of the Najaf situation.
Followers of Shia cleric Moqtada Sadr are battling US and Iraqi forces there.
Iran's defence minister had slammed his Iraqi counterpart as an inexperienced political amateur for making the claim.
The BBC's Miranda Eeles in Tehran says the row highlights a growing mistrust between the neighbours, which fought an eight-year war in the 1980s.
She adds that since the overthrow of Saddam Hussein's Sunni Muslim regime, Iran has been seeking to build its influence over Iraq's Shia majority, but both sides are still working out how best to engage each other.
'Number one enemy'
The latest disagreement began on Monday when Mr Shalaan, Iraq's interim defence minister, told Dubai-based al-Arabiya television that Mr Sadr's militia was receiving weapons from Iran.
"Iran has left a fingerprint in Najaf. There are weapons made inside Iran that were found in Najaf in the hands of these criminals which have received these arms through the Iranian borders," he said.
"Facts about what has happened to the Iraqi people show... that [Iran] is the number one enemy."
His Iranian counterpart Ali Shamkhani hit back on Tuesday, saying Mr Shalaan's comments showed he lacked the minimum qualifications for knowing the truth.
Iran's right-wing press went further, with one conservative newspaper, Kayhan, describing Mr Shalaan as a "dyed-in-the-wool Baathist" whose hands are dipped deep in the innocent blood of Iraqi and Iranian Muslims.
Later on Tuesday, Mr Kharrazi said he had discussed the matter with his own counterpart, Hoshyar Zebari, by telephone.
"The Iraqi foreign minister expressed regret and said [Mr Shalaan's comments] were not the official stance of the Iraqi government," he told the official Irna news agency.
"Such remarks are designed to create an atmosphere of animosity between the Iraqi and Iranian nations... The Iraqi government must prudently stop this," he added.
Mr Kharrazi also said Tehran had invited interim Iraqi Prime Minister Iyad Allawi to visit Iran.
Our correspondent in Tehran says there are many rumours circulating about the US trying to gain influence in the new Iraq to the detriment of Iran.
Many believe the US fears co-operation between Iran and Iraq and is trying to stir up tensions, she says.
The situation has been further complicated by an arrest warrant issued by an Iraqi judge for Ahmed Chalabi, a politician with strong links to Iran.
A former protege of the Pentagon, Mr Chalabi fell out of favour earlier this year amidst charges of passing on US intelligence to the Iranians.