"Businessmen from some countries in the region, with the help of their governments, are providing significant funds to terrorist groups in Iraq," Assadi said in an interview with state television.

"The leaders of these countries say they know nothing about it but the facts prove otherwise."

There are nearly 300 prisoners from other Arab countries in Iraqi jails, the majority of them Saudis, according to the justice ministry.

Assadi said the worsening security situation in neighbouring Syria, where President Bashar al-Assad's regime has been battling to crush an uprising for 11 months, was a cause for concern.

"What worries us is the deteriorating situation on the Syrian side, because the army is occupied with other problems," he said.

"There is smuggling and even clashes between the smugglers and the Syrian forces.

"The Syrian army is still at the border but in reduced numbers. It's chaos and public institutions are being pillaged from near the frontier. We have even seen some soldiers leaving their positions on the border."

"We will never allow any third country to use any NATO facility. Our position will be even more clear if it is particularly Israel," Davutoglu told a joint news conference with visiting NATO chief Anders Fogh Rasmussen in Ankara.

His remarks came after some media outlets reported that the United States and Israel have carried out a joint missile test by using intelligence gathered by a NATO radar system based in eastern Turkey.

Last year Ankara decided to host in a military facility base near Malatya in the southeast an early warning radar as part of NATO's defense architecture.

"It is a NATO system and we appreciate that Turkey has agreed to host one of the facilities," said Rasmussen.

"Data are shared within our alliance among the allies. It is a defence system to protect the populations of NATO allies," he added without mentioning Israel, which is not a NATO member.

Turkey's relations with one-time regional ally Israel plunged into deep crisis in 2010 when Israeli forces killed nine Turks in a raid on a Turkish ferry, part of an activist flotilla seeking to breach Israel's naval blockade of Gaza.

In 2011, Turkey expelled the Israeli ambassador and axed military ties and defence trade after Israel's refusal to apologise and compensate the flotilla victims.

Leaders of the 28-member NATO alliance gave their backing in 2010 for the Europe-wide ballistic missile shield -- which US officials say is aimed at thwarting missile threats from the Middle East, particularly Iran.

Turkey, a member of NATO since 1952, has repeatedly said the missile system targets no specific country.

"This system is not against any country," Davutoglu said. "It is entirely for defence purposes."

Tehran criticised Ankara's decision, saying it would create tension and lead to "complicated consequences."