Iraqi Prime Minister Nuri al-Maliki said on Friday that Turkey is becoming a "hostile state" in the region, accusing its premier of interfering in internal Iraqi affairs and of sectarianism.
"The latest statements of (Turkish Prime Minister Recep Tayyip) Erdogan are another return to the process of interfering in Iraqi internal affairs and it confirms that Mr Erdogan is still living the illusion of regional hegemony," Maliki said in a statement posted on his website.
"It is regrettable that his statements have a sectarian dimension which he used to deny before but which have become clear, and are rejected by all Iraqis," Maliki said.
"Insisting on continuing these internal and regional policies will damage Turkey's interests and makes it a hostile state for all," he said.
After closed-door talks on Thursday with Massud Barzani, the president of the autonomous Kurdistan region in north Iraq, Erdogan stoked further tensions with Iraq by accusing Maliki of taking an "egocentric approach" in politics.
"The current prime minister's treatment toward his coalition partners, his egocentric approach within Iraqi politics... seriously concern Shiite groups, Mr Barzani and the Iraqiya group," the main Sunni-backed political bloc, Erdogan was quoted by local media as saying.
It is a new low for Iraq-Turkey ties, although relations have been tense for some time.
Earlier this year, Erdogan warned Maliki against fomenting sectarian tensions, which Maliki said "provoked all Iraqis," and the two countries called in each other's respective ambassadors to express their anger.
Sunni-majority Turkey and Shiite-majority Iraq have taken sharply different tacks on violence in Syria, an issue that has furthered sectarian tension and division between Sunni and Shiite states in the region.
In Syria, the regime of President Bashar al-Assad, a member of the minority Alawite sect which is an offshoot of Shiite Islam, is carrying out a bloody crackdown on a Sunni-led uprising against his rule in which thousands of people have been killed.
Erdogan has called for Assad to step down, while Maliki has said non-interference in Syria and opposition to arming either side in the conflict is in Iraq's best interest.
Turkey is one of Iraq's top trade partners, with bilateral trade between the two neighbours valued at $12 billion in 2011.