A source inside the border patrol in the northern Kurdish provinces of Iraq said Iranian forces crossed the border during the weekend in pursuit of members of the Party for Free Life in Kurdistan, or PJAK.
"The Iranian force is still stationed at the same positions it penetrated into on Sunday, following clashes between both sides," the source told the Voices of Iraqi news agency.
Turkey has been locked in battle with militants from the separatist Kurdistan Workers' Party, or PKK, since 1984. Iran has fought PKK counterparts with PJAK along its border with Turkey and Iraq.
The border skirmish comes as U.S. Defense Secretary Leon Panetta told reporters that the remaining U.S. forces in Iraq would confront Iran in its alleged support of Shiite militias operating southern Iraq.
"I think the key right now is to go after them in Iraq and do what we can to prevent those weapons coming into Iraq and go after those groups that would make use of those weapons," he said. "That's what the principal focus has to be on."