Iran and the United States will meet shortly to discuss security in Iraq, the Iraqi Foreign Minister said today.
The worsening chaos has pushed the two countries, which have not had diplomatic ties since shortly after Iran's 1979 revolution, to seek common ground on Iraq.
Twenty-nine villagers were gunned down in Diyala province by men dressed in Iraqi military uniforms yesterday.
Militants who had fled US and Iraqi troops conducting a major operation to corner suspected Sunni al-Qaeda Islamists in Baquba are suspected of carrying out the attack. US commanders say many got away.
Washington accuses Shia Iran of fomenting sectarian violence in Iraq. Iran denies backing the anti-US insurgency and blames the US-led invasion in 2003 for the bloodshed between Iraq's majority Shia and minority Sunni Arabs.
"I can confirm that there will be a second round of talks in Baghdad soon. It will be at the ambassadorial level. Iraq will be there and the talks will be about Iraq's stability and security," Hoshiyar Zebari said today.
In Tehran, Iranian Foreign Minister Manouchehr Mottaki told reporters he saw a "high possibility" a second round would take place in the "near future". Officials at the US embassy in Baghdad said they had no comment at this stage.
The Iranian and the US ambassadors to Iraq last met in Baghdad on May 28th - the most high-profile meeting of the two foes in almost three decades.
The United States has been leading diplomatic efforts to isolate Iran over its nuclear ambitions - but both sides say any talks will focus solely on matters in Iraq.