Turkey has revoked its decision to send additional troops to Iraq to train forces fighting Islamic State in Iraq and Syria (ISIS).
The move follows Iraqi Prime Minister Haider al-Abadi's warning to turn to the UN Security Council if Turkish troops were not withdrawn within 48 hours.
Abadi was quoted by The Wall Street Journal as saying: "This is considered as a grave violation to Iraq's sovereignty and does not respect good neighbourly relations between Iraq and Turkey.
"Iraqi authorities call upon Turkey to withdraw immediately from Iraqi lands."
In a letter cited by Reuters, Turkish Prime Minister Ahmet Davutoglu said that the country's armed forces would not send additional forces until Baghdad's 'sensitivities' were placated.
Davutoglu had claimed earlier that the act was a routine troop rotation to support a camp that Turkish forces had set up at the Mosul governor's request.
One Turkish official said: "Turkey has been training the Peshmerga fighters as part of the anti-ISIL campaign for some time. This is nothing new."
The Turkish military has conducted sessions, including weapons and artillery training, with participation from more than 2,500 Peshmerga soldiers.
In 2014 ISIS captured Mosul, the second largest city in Iraq, taking control of a number of the city's local government offices, military bases and police stations.
The US Department of Defense (DoD) recently announced its decision to deploy a specialised expeditionary targeting force to combat ISIS.