Iran's foreign minister has said Tehran has rejected for now a US offer for direct talks on Iraq.
Mr Mottaki (L) says Iraq must decide how long to keep US troops
On a visit to Iraq, Manouchehr Mottaki said the US tried to exploit the issue for propaganda and create a negative atmosphere by raising other issues.
Mr Mottaki also warned the US that Iran would retaliate if attacked.
Washington and Tehran have clashed recently over accusations that Iran's nuclear power programme is a cover for making weapons.
But in what correspondents say is a sign of better relations between Iraq and Iran, Iraqi Foreign Minister Hoshyar Zebari said Tehran had the right to develop a peaceful nuclear programme.
In March, the US ambassador to Iraq, Zalmay Khalilzad, floated the proposal of direct Iranian-US contacts to discuss mutual security concerns in Iraq.
Iran originally reponded positively, but both sides have now backed off.
Washington and Tehran severed relations after the Islamic Revolution in 1979.
The US government first suggested talks with Iran about the security situation in Iraq last year because of concerns Iran was funnelling assistance to some of the groups involved in the violence here.
President Bush then authorised Mr Khalilzad to hold such discussions but focused on Iraq and not covering Iran's nuclear programme.
Earlier this year Tehran accepted the idea, but Mr Mottaki said his government had been unhappy at the subsequent US reaction.
"The American side tried to use this decision as propaganda, and they raised some other issues, they tried to create a negative atmosphere, and that is why the decision which was taken is for the time being suspended," he said.
He also said the continued presence of American and other foreign troops in Iraq had a negative effect on Iran's security, but said it was up to the Iraqi government to decide if, and for how long, they stayed.
The threat of a confrontation was minimal, he said, but warned the US not to use military force against Iran.
Both Iran and Iraq maintain a constant vigil along their border
"In the event that America launches a strike from any place, Iran will retaliate by targeting that place," he said.
The US has not ruled out using force against Iran if other methods fail to resolve the stand-off over Iran's nuclear programme.
Iran insists the programme is for peaceful proposes only, but Western nations are concerned it is seeking a nuclear weapons capability.
'Right to knowledge'
Mr Zebari said the two foreign ministers had discussed concerns about Iranian interference in Iraq but said he welcomed the support Tehran was offering to the new Iraqi government here.
He said he had confidence in Iran's ability to find a solution to the nuclear crisis.
"We respect the right of the Islamic Republic to acquire scientific knowledge [in this area], in respect of international law," he said.
Mr Mottaki is the first senior Iranian to visit Iraq since President Mahmoud Ahmadinejad and the newly-formed Iraqi government came to power.
The two nations fought an eight-year war in the 1980s and relations remain complex, despite improving dramatically since the fall of Saddam Hussein.