A convoy carrying wounded Syrian soldiers was ambushed as it passed through Iraq's western Anbar province on Monday en route to the Syrian border, killing forty–eight, where they were to be returned through "official channels," the Iraqi defence ministry said.
Nine Iraqi guards were also killed, the ministry added.
Baghdad has consistently avoided joining calls for the departure of Syrian President Bashar al-Assad, whom rebels are fighting to overthrow. Instead it says it opposes arming either side and has urged an end to violence by all parties.
But the ambush is just the latest encroachment into Iraq of the bloody and protracted conflict to jeopardise its efforts to remain outside the fray.
The Syrian civil war "is a conflict with regional dimensions," which particularly threatens religiously and ethnically mixed countries, such as Iraq and Lebanon, said political analyst Hamid Fadhel.
Monday's ambush "will increase the danger of the conflict in Syria today, and is a clear message for all Iraqis that what is happening in Syria" has moved to Iraq, Fadhel said.
John Drake, an Iraq specialist with risk consulting firm AKE Group, said the ambush potentially marked a major escalation in the spillover of the conflict.
"If this was actually by Syrian rebels, it would be the biggest incursion into Iraqi territory since the start of the fighting in Syria," he said, adding there might have been at least "some support from Iraqi nationals."
"The fact that the (Syrian) victims entered Iraq for their safety could prompt the Syrian rebels to view Iraq and Iraqi interests as a potential threat to their effort," he said.
"This could therefore lead to a rise in intent amongst some of the more radical anti-Assad groups to attack the Iraqi state."
Iraq has been caught between conflicting pressures on the Syria conflict—its eastern neighbour, Iran, backs Assad, while the United States and many Arab states support his overthrow.
Political analyst Ihsan al-Shammari said the conflict had the potential to inflame sectarian tensions inside Iraq, which was rocked by devastating bloodshed between its Sunni Arab minority and Shiite majority in 2006 and 2007.
Assad's regime is dominated by his minority Alawite community, an offshoot of Shiite Islam, while the rebels are mainly Sunni.
"If Iraq gets involved in the Syria conflict, it will be the beginning of a major armed sectarian explosion," Shammari said.
Official reaction to the ambush highlighted Iraq's fears of a spillover of the violence.
The defence ministry said a Syrian "terrorist group," carried out the ambush, which it termed "an attack against the sovereignty of Iraq, its land and its dignity."
Prime Minister Nuri al-Maliki's spokesman, Ali Mussawi, said: "This confirms our fears of the attempt of some to move the conflict to Iraq, but we will face these attempts by all sides with all of our power."
It is not the first time the conflict has crossed the border. Fire from the Syrian side killed an Iraqi soldier in northern Iraq on Saturday and a young girl in western Iraq on September 7 last year.
US officials have also repeatedly called on the Iraqi government to halt the use of its airspace by Iranian flights to Syria, charging that they are being used to transport weapons to Assad's forces.
On Sunday, the Syrian National Council, a key armed opposition group, alleged that Iraq "gave political and intelligence support to the Syrian regime."
And like other countries bordering Syria, Iraq has seen the arrival of a flood of refugees from the conflict—more than 105,000, according to the United Nations.