A senior US state department official has said that the US has shown "arrogance and stupidity" in Iraq.
Mr Fernandez said failure in Iraq would be a regional disaster
Alberto Fernandez made the remarks during an interview with Arabic television station al-Jazeera.
The state department says Mr Fernandez was quoted incorrectly - but BBC Arabic language experts say Mr Fernandez did indeed use the words.
It comes after President George W Bush discussed changing tactics with top US commanders to try to combat the unrest.
Mr Fernandez, an Arabic speaker who is director of public diplomacy in the state department's Bureau of Near Eastern Affairs, told Qatar-based al-Jazeera that the world was "witnessing failure in Iraq".
"That's not the failure of the United States alone, but it is a disaster for the region," he said.
"I think there is great room for strong criticism, because without doubt, there was arrogance and stupidity by the United States in Iraq."
He also said that the US was now willing to speak to any insurgent group except al-Qaeda in an effort to reduce sectarian bloodshed in Iraq.
"We are open to dialogue because we all know that, at the end of the day, the solution to the hell and the killings in Iraq is linked to an effective Iraqi national reconciliation."
Winds of change?
However, state department spokesman Sean McCormack said: "What he [Alberto Fernandez] says is that it is not an accurate quote."
Mr McCormack also denied that the US had been guilty of arrogance or stupidity saying that history would be the judge of US actions in Iraq.
The BBC Monitoring Service has confirmed that Mr Fernandez did use the words "arrogance and stupidity" in his interview.
Mr Fernandez's comments came after Mr Bush said that US troops were changing tactics to deal with the insurgency in Iraq.
Mr Bush held a video conference on the new measures with top US military commanders in Iraq on Saturday against the backdrop of more US losses in Iraq - 78 so far this month.
Mr Bush held talks on the violence with his military commanders
A new poll suggests two-thirds of Americans believe the US is losing the war in Iraq, a proportion which analysts says could translate into a drubbing at the polls for Mr Bush's Republican Party in next month's mid-term elections.
The BBC's James Westhead in Washington says that while there is no official change in US strategy, change is on everyone's lips.
But a report in the New York Times that officials are drawing up a timetable for Iraq's government to improve security has been denied by both White House and state department officials.
In an interview with the BBC, British Foreign Office Minister Kim Howells has suggested that the Iraqi security forces could take over much of the work of US-led forces within a year.
On Sunday funerals were taking place for 17 people killed in a mortar attack on a market near the capital, Baghdad.