Baghdad has accused Ankara of risking a regional war by keeping its forces inside Iraq, with the dispute complicating plans for the ambitious American-backed Mosul operation.
"No matter what the Iraqi government in Baghdad says, a Turkish presence will remain there to fight against Daesh (IS), and to avoid any forceful change of the demographic composition in the region," Prime Minister Binali Yildirim said in televised comments.
Turkey has an estimated 2,000 troops in Iraq -- around 500 of them in the Bashiqa camp in northern Iraq training Iraqi fighters who hope to participate in the battle to recapture Mosul, according to Turkish media.
The Iraqi parliament labelled the Turkish troops an "occupying force" while Iraqi Prime Minister Haider al-Abadi raised fears that Turkey's move could lead to "regional war".
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In protest, Ankara summoned the Iraqi ambassador, and Baghdad was summoning the Turkish envoy in a tit-for-tat move.
Yildirim on Thursday said Baghdad's reaction was not in "good faith".
"It's not the (Iraqi) government's right to speak like that," he said.
"When troops from 63 countries are present there, it is unreasonable (for the Iraqi government) to focus on Turkey's presence."
The rising tension between Ankara and Baghdad could threaten the planned major US-backed operation by the Iraqi army to retake Mosul which was captured by IS group in 2014.
President Recep Tayyip Erdogan has expressed Ankara's willingness to join the battle but Turkey also fears the operation could ignite sectarian tensions.
It is particularly alarmed by the proposed role of Iraqi Shia militia in the planned offensive as well as the use of a Kurdish militia that Ankara deems to have links to the outlawed Kurdistan Workers Party (PKK).