Bahrain summoned Iran's charge d'affaires on Monday in protest at "interference" by Tehran in the internal affairs of the Gulf kingdom, the foreign ministry said.
Tehran's envoy Mahdi Islami was summoned "to address his country's interference in the kingdom's internal affairs through deliberately attributing false information to Bahraini officials," the ministry said.
Undersecretary Hamad al-Amer told Iran's envoy that his country's "conduct incites sedition and sectarianism" in Shiite-majority Bahrain which is ruled by the Sunni Al-Khalifa dynasty, it said.
He also dismissed "claims" in the Iranian media that Manama had requested Iranian mediation in domestic affairs as "false."
"Any interference in Bahrain's domestic affairs through mediation or other methods, as well as in dealing with its citizens, is unacceptable and would be an encroachment on its sovereignty and independence," he said.
The protest followed a meeting between Iran's representative and the spiritual leader of the Shiite opposition, Ayatollah Issa Qassem.
The main Shiite opposition, Al-Wefaq, said in a statement that the meeting between Islami and Qassem took place in response to a Bahraini request for mediation.
Iran's deputy foreign minister in charge of Arab and African nations, Hossein Amir Abdolahian, was quoted on the foreign ministry website as saying that the request for Iranian help was forwarded by Manama.
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Amir Abdolahian said it followed a series of meetings, including one between King Hamad and Iran's foreign minister on the sidelines of an Organisation of Islamic Cooperation meeting in Mecca.
"The Islamic republic of Iran announced a readiness to do so and established contacts with relevant nations in the region... but for reasons unknown to us the Bahraini side did not show seriousness in its request and the efforts were halted," he added.
He warned Bahrain "is responsible for any repercussions if it chooses a security approach to a political one in solving the issue."
Shiite-majority Iran has supported protests by Bahrain's Shiites against the Saudi-backed Sunni monarchy, sparking a diplomatic crisis not only with the small kingdom but also with the area's economic powerhouse.
Bahrain came under strong criticism from international rights groups over last year's crackdown on protests.
An international panel commissioned by King Hamad to probe the clampdown found that excessive force and torture had been used against protesters and detainees, but said there was no proof of a link between Iran and the protests.
Bahrain, home to the US Fifth Fleet and strategically situated across the Gulf from Iran, has continued to witness sporadic demonstrations, mostly outside the capital Manama, since it crushed the protest movement in March last year.
According to the International Federation for Human Rights, a total of 80 people have been killed in Bahrain since the violence began on February 14, 2011.