A senior Iranian military official said Iran was ready to help Iraq battle al-Qaeda ''terrorists'' in the neighboring country's Sunni-dominated western Anbar province.
Iraqi troops had been trying to dislodge fighters from the al-Qaeda group, from two key cities the militants took last week.
According to general Mohammad Hejazi, deputy chief-of-staff of Iran's army, who was quoted by Iranian media on today, the Islamic Republic could offer ''military equipment and advisers'' should Baghdad ask for it.
He, however ruled out sending troops to Iraq.
Meanwhile, fighting in the Anbar province of Iraq killed 22 soldiers and 12 civilians, along with an unknown number of militants yesterday.
Tehran is allied with the Shiite-led government in Baghdad.
In another development, Fallujah fell into the hands of al-Qaeda-linked militants over the weekend and the fact that the group's leader had pledged to do so had confirmed his strength according to commentators.
They point out that more than seven years after Abu Musab Al-Zarqawi was killed by US forces, the Islamic State in Iraq and the Levant, or ISIL, was emerging as the most powerful Sunni militant force in the region. Zarqawi was the affiliate of al-Qaeda in Iraq.
Vowing to erase the western-imposed border with Syria, where his troops were also fighting, Abu Bakr al-Baghdadi had said in a June audio statement that they were there to stay.
He had called on followers to ''tear apart'' governments in both countries as also their regional backers.
With his call for holy war attracting many fighters from the region, the ISIL seems to be gaining the upper hand over US-backed rebels fighting Syrian president Bashar al-Assad.
The growing strength of his forces also has Iraqi prime minister Nouri al-Maliki, who leads a Shiite-dominated government, worried. The ISIL is already struggling to assert control over the oil-rich country in the wake of the US pullout.
Commentators say the group's success in capturing Fallujah might also shift the pattern of Iraq's sectarian violence from car bombs and suicide attacks to ground battles.
Bloomberg quoted Shadi Hamid, director of research at the Brookings Doha Center in Qatar as saying, many people thought that al-Qaeda was on its way out a few years ago. He added that Al-Qaeda had staying power and their so-called franchising approach had been successful.