The Arab League called on Tehran on Monday to halt what it described as a media campaign against Bahrain over a proposal for political and military union between Gulf Arab states.
Saudi Arabia has been pushing the idea of closer Gulf integration to contain Shi'ite Muslim unrest in Bahrain and counter the influence of regional Shi'ite power Iran.
Riyadh's initial goal appears to be a merger with Bahrain, where majority Shi'ites have been staging pro-democracy demonstrations targeting the Sunni Muslim ruling family for over a year. Bahraini leaders have been publicly receptive to union.
"The Iranian government must stop its media escalation campaign and provocative statements from Iranian officials regarding the situation in Bahrain," Arab League Secretary General Nabil Elaraby said in a statement.
"Any union steps between Bahrain and Saudi Arabia are a sovereign issue of the two states and other Gulf countries and no other country has the right to interfere in it," he said.
Iranian state television aired last week footage of thousands of people holding rallies around the country protesting against the proposed Manama-Riyadh union and an influential cleric denounced the idea as an "ill-fated plot".
Tension between Iran and U.S.-allied Gulf Arab states has run high in recent months, with Arab leaders accusing the Islamic Republic of fomenting Shi'ite Muslim unrest in Bahrain - a charge that Tehran and the protesters deny.
Bahrain, the base for the U.S. Fifth Fleet, has been in turmoil since pro-democracy rallies first erupted in February 2011, inspired by successful uprisings in Egypt and Tunisia.