Iraq demanded on Friday that Iranian troops occupying an oil well in a disputed oilfield in the south of the country withdraw immediately.

"Iraq demands the immediate withdrawal from well No. 4 and the Fakka oilfield, which belongs to Iraq," government spokesman Ali al-Dabbagh.

"Iraq is looking for a peaceful and diplomatic settlement to this issue," he added.

The Iraqi deputy interior minister stated earlier that 11 Iranian soldiers had taken control of the oil well.

Iran denied the reports.

"The company denies Iranian soldiers taking control of any oil well inside Iraqi territory," a National Iranian Oil Company spokesman was quoted as saying by Iranian state media.

There has so far been no military response from Iraq to the alleged incident.

Regional media say such incursions by Iranian troops are a frequent occurrence.

MOSCOW, December 18 (RIA Novosti)