U.S. Ambassador to Iraq Ryan Crocker says Iranian support for Shi'ite militias in Iraq has risen since the U.S. and Iran held a first round of talks on the issue in May.
Crocker spoke after holding a second round of talks with his Iranian counterpart, Hassan Kazemi Qomi, in Baghdad Tuesday - in a rare meeting between officials of the two countries.
Iran has denied supplying weapons and training to Shi'ite militias in Iraq.
Iraqi Prime Minister Nouri al-Maliki opened the meeting by appealing to Iran and the U.S. to help stabilize his country.
The two sides discussed creation of a security committee made up of Iranian, Iraqi, and U.S. officials, but details remain to be worked out.
The United States had said the talks would focus solely on the security situation in Iraq, despite tensions over Iran's nuclear program and Iranian-Americans detained by Tehran.
The United States and Iran have had little official contact for 27 years.
The United States broke diplomatic relations in April, 1980 after Iranian activists seized the U.S. Embassy in Tehran and took its staff hostage.
Relations between Iran and Iraq have improved since the ouster of Saddam Hussein as Iraqi leader. Both countries have Shi'ite majorities. Saddam's Sunni-led government fought Iran in the 1980-88 Iran-Iraq war.