The government, which vowed to appeal, holds that Tehran was behind the attack on the Argentine Jewish Charities Federation, or AMIA, that left 85 people dead and 300 others injured two decades ago.
"The ultimate interpreter of the constitution will be the Supreme Court," said Justice Minister Julio Alak yesterday.
In Tehran, the foreign ministry expressed dissatisfaction at the ruling.
"The Argentinean court is denying a suitable opportunity to find the truth behind the AMIA disaster and resolve pertinent bilateral issues," spokeswoman Marzieh Afkham said in a statement reported by Iranian media.
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The attorney general in the case, Alberto Nisman, had said the agreement constituted an "undue interference of the executive branch in the exclusive sphere of the judiciary."
Argentina charges that Hezbollah, the Lebanese Shiite movement, carried out the attack under orders from Iran, which Tehran denies.
Since 2006, Argentine courts have demanded the extradition of eight Iranians, including former president Akbar Hashemi Rafsanjani, former defense minister Ahmad Vahidi and Mohsen Rabbani, Iran's former cultural attache in Buenos Aires.
Another court decision ordered that extradition requests for the defendants be reiterated and made a demand for Interpol to reactivate memos of arrest for the former Iranian officials.