Kurdish authorities said villagers were fleeing areas north of the Kurdish capital, Erbil, after Iranian forces pounded the area Tuesday.
Iran has thousands of troops deployed along the border with Iraq ostensibly to take on fighters with the Free Life Party of Kurdistan, or PJAK. Turkey is busy fighting the separatist Kurdistan Workers' Party, or PKK, along its border.
Both sides have crossed into Iraq during attacks and, in some instances, killed Kurdish civilians during the raids.
Kurdish officials have complained about the cross-border raids and Tuesday's shelling comes a day after PJAK said it was interested in a truce.
PJAK in a statement sent to the Voices of Iraq news agency said it would hold to a cease-fire starting Tuesday "or else Iran would be responsible for future incidents."
In terms of Turkey's response, Washington said it respected Ankara's right to self defense but stressed Iraq's sovereignty must be respected. U.S. military forces in Iraq had shared information regarding the PKK with Turkey in the past.