The US is willing to attend a regional conference in Iraq next month that will include representatives from Iran and Syria, the White House says.
The US has accused Iran and Syria of fomenting violence in Iraq
Iraq said the talks in Baghdad were aimed at seeking ways to stabilise the country and would be an "ice-breaker" for Western and regional powers.
The US has been under pressure to include Iran and Syria in dialogue.
Members of the Iraq Study Group, a cross-party panel which suggested such talks in December, welcomed the move.
Leon Panetta, a member of the panel, said the announcement was an important step towards bringing stability to Iraq.
An anonymous senior administration official quoted in Wednesday's New York Times said the ratcheting up of confrontational rhetoric against Iran in recent weeks has allowed the US to give the appearance of being in control - not to be talking from a position of weakness.
The BBC's Jonathan Beale in Washington says the timing of the meeting may come as a surprise given the tension between the US and Iraq's neighbours.
But he says this may be a forum in which Washington will feel comfortable in raising its concerns and allegations that Iran is supplying Shia insurgents in Iraq with weapons.
US Secretary of State Condoleezza Rice said: "We hope that all governments seize this opportunity to improve their relations with Iraq and to work for peace and stability in the region."
Iraq's foreign minister said he wants Iraq to be a unifying issue
Asked about face-to-face meetings with other delegates, State Department spokesman Sean McCormack would not "exclude any particular interaction".
"I'm sure that there are going to be different kinds of discussions, meaning different groupings," he said.
The five permanent UN Security Council members and the Arab League are to be invited to the meeting.
The conference is likely to be at non-ministerial level.
However, Ms Rice said there could then be a second meeting in April of ministers from those attending the first plus others in the G8 grouping.
The administration of President George W Bush has been under pressure in Congress and from the findings of the bipartisan Iraq Study Group to include Syria and Iran in dialogue to stabilise Iraq.
Ms Rice said: "Success in Iraq requires the positive support of Iraq's neighbours. This is also one of the key findings of the Iraq Study Group."
Earlier, Iraqi Foreign Minister Hoshiyar Zebari said: "We want Iraq, instead of being a divisive issue, to be a unifying issue."