Iraq on Sunday gave Turkey 48 hours to withdraw forces it said had entered the country illegally or face "all available options", including recourse to the UN Security Council.
Baghdad, which is struggling to assert its sovereignty while receiving foreign assistance against the Islamic State jihadist group, said Turkish forces with tanks and artillery entered Iraq without its permission.
Turkish Prime Minister Ahmet Davutoglu said in a letter to his Iraqi counterpart Haider al-Abadi that there would be no deployment of forces until Baghdad's concerns were addressed.
However, the future of the forces already sent remained unclear.
"In the absence of the withdrawal of these forces within 48 hours, Iraq has the right to use all available options," including recourse to the Security Council, a statement from Abadi's office said.
The Turkish forces entered "without the approval or knowledge of the Iraqi government," it said.
In practical terms, Iraq's options are primarily diplomatic, as its forces are tied down battling IS jihadists and Ankara has a far more powerful military.
Turkey has troops at a base in the Bashiqa area in Nineveh province to train Iraqi Sunni volunteers hoping to retake the nearby city of Mosul from IS, which seized it and swathes of other territory in June 2014.
Turkish Prime Minister Ahmet Davutoglu sent a letter to Abadi on Sunday to update him about "the training programme we have been implementing in Bashiqa since last March as well as tasks and activities of our forces there," a source in his office said.
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Davutoglu said in the letter that "there will be no deployment of forces to Bashiqa until the sensitivities of the Iraqi government are addressed," the source said.
A day earlier, Davutoglu downplayed the deployment as "routine rotation activity" associated with the training effort, and as "reinforcement against security risks".
"This is not a new camp," Davutoglu said.
Rather, it is a pre-existing "training facility established to support local volunteer forces' fight against terrorism", set up in coordination with the Iraqi defence ministry, he said.
But Iraq's autonomous Kurdish region, which has forces in the area, said that Turkey had sent military experts and supplies to expand the base.
Iraqi Defence Minister Khaled al-Obeidi also asked for the forces to be withdrawn in a telephone call with his Turkish counterpart Ismet Yilmaz, the ministry said on Sunday.
According to the statement, Yilmaz said the forces were sent to protect Turkish trainers, but Obeidi said they were more than the numbers required for that task.
Baghdad's relations with Turkey had improved recently but remained strained by Ankara's relationship with Iraq's autonomous Kurdish region and differences over the Syrian civil war.
Abadi has repeatedly said Iraq needs all the help it can get to fight IS, but he is also walking a fine line between receiving that support and projecting sovereignty.