Iran has increased support for militia groups in Iraq in recent months, the US ambassador in Baghdad has said.
The envoys met in May for their historic first encounter in Baghdad
Ryan Crocker spoke after meeting his Iranian counterpart for rare talks on Iraq's security crisis, only the second direct meeting in almost three decades.
Washington blames Tehran for fomenting violence in Iraq, while the Iranians are demanding the US withdraws troops.
But the US and Iran did agree to form a security committee, with Iraq, to focus on containing Sunni insurgents.
The committee would concentrate on the threat from groups such as al-Qaeda in Iraq, officials said, but not those militia groups the US accuses Iran of funding and training.
The talks, described as heated, started after a plea from Iraq's prime minister to support stability in his country.
Nouri Maliki appealed for help to counter extremism, warning it reached beyond the country's borders.
"We are hoping that you support stability in Iraq, an Iraq that doesn't interfere in the affairs of others nor wants anyone to meddle in its own affairs," he said in a statement released by his office.
Speaking at a news conference after the talks, Mr Crocker described events since the previous bilateral meeting as "not exactly encouraging".
"What we have been seeing on the ground over the last couple of months represents an escalation, not a de-escalation," he said.
But Iraq's Foreign Minister, Hoshyar Zebari, held out hope that co-operation on the committee could bode well for future talks.
"We hope that the next round of talks will be on a higher level if progress is made," he said.
US officials first raised the militia issue at talks on 28 May. There was no immediate response from the Iranians.
During the talks, Iranian ambassador Hassan Kazemi-Qomi reportedly brushed aside the US allegations, saying that the US had no proof of its claims.
From Tehran, foreign ministry spokesman Mohammed Ali Hosseini said the US would be better off finding ways to get out of the Iraq crisis.
"These declarations aim to deceive public opinion which is troubled by the US's warlike policy," he was quoted as saying by the French news agency AFP.
On Monday, Iraqi President Jalal Talabani held separate talks with the two ambassadors, urging them to work together.
But a US state department spokesman said US intelligence showed Iran was continuing to stoke sectarian tensions and was still "providing assistance" to militias and death squads.
The US has also said it believes Iran may have been implicated in the capture of five Britons, who were taken hostage in Baghdad two months ago.
The Iranians, meanwhile, have called for the release of five of their citizens detained by US forces in Iraq in January.
The US has said they are members of the elite Quds Force of the Islamic Revolution Guard Corps (IRGC), but Tehran says they are diplomats.
The BBC's Nicholas Witchell, in Baghdad, says that despite all the differences between the US and Iran, neither country wants the turmoil in Iraq to continue unchecked.
Analysts say the atmosphere could also be more promising because Iran is trying to prevent a new round of sanctions, threatened over its controversial nuclear programme.
The US broke off relations with Iran in 1980 when Islamic revolutionaries seized the US embassy in Tehran and held many diplomats hostage.