Foreign Minister Hoshyar Zebari made the comments to reporters at a press conference with U.S. Deputy Secretary of State John Negroponte.
Zebari said the two sides were "very close" to an agreement to replace the U.N. mandate that expires this year.
But he added that the issue needs "some bold political decisions." He said he expected "hectic political meetings here in Baghdad" to determine the fate of the agreement.
Meanwhile, a top Iranian military official urged Iraq to reject the proposed U.S.-Iraqi security deal, calling the agreement a "disgrace."
Gen. Masoud Jazayeri's comments came Tuesday as Iraq's parliamentary speaker arrived in Tehran to discuss the deal and as Zebari spoke with Negroponte in Baghdad.
Iran, which is close to Shiite parties who dominate Iraq's government, has repeatedly expressed its opposition to any security deal that allows American forces to remain in neighboring Iraq. Tehran contends that the American presence is the cause of instability in Iraq and the region.
"The Iraqi people won't be deceived by propaganda and the psychological warfare launched by the U.S. and its allies to pressure the Iraqi government to approve the security deal," Jazayeri, deputy chief of staff at the Iranian armed forces, said in a statement Tuesday.
"Undoubtedly, the Iraqi leaders are careful of any mischief in this regard and won't allow Iraqi history to be stained with such a disgrace," Jazayeri said.
U.S. Ambassador to Iraq Ryan Crocker accused Iran last month of blocking the deal, saying a steady stream of public statements from clerical and political figures in Tehran make it clear that Iran is interfering in the bilateral negotiations between Iraq and the United States.
On Tuesday, Iraqi parliament speaker Mahmoud al-Mashhadani told the Iranian news agency IRNA he would discuss the proposed deal with Iranian officials during his Tehran visit. No reports are yet available on the details of the talks.
Al-Mashhadani, a Sunni, arrived in Tehran Tuesday using an Iranian plane, a day after his Iraqi plane was initially turned away. Iranian officials said the type of the plane was the reason for not being granted permission to land in Tehran, but they did not elaborate.
Washington and Baghdad have been negotiating for months on the agreement, which would set the terms for the future U.S. presence in Iraq for years to come. A main sticking point has been the issue of legal immunity for U.S. troops under Iraqi law.
Iran's hard-line newspapers have said the U.S.-cooked deal would "turn Iraq into a full-fledged colony" and have urged Iraqis to oppose the proposed deal.
Supporters of popular Iraqi Shiite cleric Muqtada al-Sadr - who is close to Iran - oppose the accord, arguing that U.S. forces should leave Iraq as soon as possible. Earlier this year, an Iraqi delegation visited Iran to convince Iranian officials to halt their alleged support for Sadr's Mahdi Army militia and urge Tehran not to publicly oppose the deal.