The PMOI released images showing alleged protests at the camp
Iraqi forces have raided a camp north of Baghdad which for years has housed an exiled Iranian opposition group.
The situation in the Ashraf camp in Iraq's Diyala province is unclear, with conflicting reports as to whether the operation spiralled into violence.
A government spokesman said forces were trying to set up a police station in the camp. But residents say they fear being forcibly repatriated to Iran.
The People's Mujahideen of Iran (PMOI) set up a base in Iraq in the 1980s.
The exiles' presence was welcomed by then-President Saddam Hussein, who was fighting a war against Iran at the time.
The camp was disarmed by US soldiers following the US-led invasion of Iraq in 2003.
But since then, relations between Iran and Iraq have improved, and the Iraqi government has repeatedly vowed to close the camp - home to some 3,500 people.
Iraqi forces took over its security from the US earlier this year, and the top US general in Iraq said he had had no advance warning of the raid.
An Iraqi government spokesman, Ali al-Dabbagh, said the aim of the raid had been to establish a police station, but denied Iraqi forces had used violent means.
Other PMOI images allegedly depict camp residents injured in the raid
"We will not force them to depart against their wishes, but they should co-operate with the governmental procedures," he said, according to the Associated Press news agency.
But a PMOI spokesman, Shahriar Kia, said four unarmed camp residents had been killed when they were fired on by security forces.
The group released video of what it said were Iraqi forces using tear gas and water cannon, and pictures showing some of dozens of residents it said had been injured.
A local Iraqi police captain also told AFP news agency about 200 camp residents had been injured, along with 60 Iraqi police and troops.
The PMOI is considered a terrorist group by the US and Iran. It was removed from a European Union terrorist list earlier this year after a legal battle.
But reports suggest Washington has received intelligence from the group, and has urged Iraqi authorities not to repatriate its members or use lethal force against them.
"We have had promises from the government of Iraq that they would deal with the [PMOI] in a humane fashion," said top US Gen Ray Odierno.
"That's what we've been watching and so far they've been abiding by that."
PMOI spokesman Mr Kia said residents were terrified of being handed over to Iranian authorities.
The group says it is ready to return to Iran - but only on condition that none of its members will be prosecuted or persecuted.