Iraq has expelled the Swedish ambassador in protest at a planned burning of the Koran in Stockholm that prompted hundreds of protesters to storm and set alight the Swedish embassy in Baghdad.
An Iraqi government statement said it had also recalled its charge d'affaires in Sweden.
Iraq's state news agency reported that the country had also suspended the working permit of Sweden's Ericsson company on Iraqi soil.
Meanwhile, in Iran, state media said the foreign ministry had summoned Sweden’s ambassador in Tehran to "strongly protest against the desecration of the holy Koran".
Anti-Islam protesters, one of whom is an Iraqi immigrant to Sweden that burned the Koran outside a Stockholm mosque last month, had applied for and received permission from Swedish police to burn the Koran outside the Iraqi embassy today.
In the event, the protesters kicked and partially destroyed a book they said was the Koran but left the area after one hour without setting it alight.
The Koran, the central religious text of Islam, is believed by Muslims to be a revelation from God.
Sweden's Minister for Foreign Tobias Billstrom said embassy staff were safe but Iraqi authorities had failed in their responsibility to protect the embassy.
The Iraqi government strongly condemned the burning of the Swedish embassy, according to a statement from the office of Prime Minister Mohammed Shia Al-Sudani which declared it a security breach and vowed to protect diplomatic missions.
But Baghdad had also "informed the Swedish government ... that any recurrence of the incident involving the burning of the Holy Qur'an on Swedish soil would necessitate severing diplomatic relations", the statement said.
The decision to recall the charge d'affaires to Sweden came while the protest in Stockholm had started but before the protesters had left without burning the Koran.
Mr Billstrom said the storming of the embassy was "completely unacceptable and the government strongly condemns these attacks".
He added: "The government is in contact with high-level Iraqi representatives to express our dismay."
The US State Department strongly condemned the attack on the embassy and criticised Iraq's security forces for not preventing protesters from breaching the diplomatic post.
The European Union also criticised the attack and said it looked forward to "swift adoption of the necessary security measures" by Iraq to prevent further incidents.
The demonstration was called by supporters of Shi'ite cleric Muqtada al-Sadr to protest against the second planned Koran burning in Sweden in weeks, according to posts in a popular Telegram group linked to the influential cleric and other pro-Sadr media.
Mr Sadr, one of Iraq's most powerful figures, commands hundreds of thousands of followers, whom he has at times called to the streets, including last summer when they occupied Baghdad's heavily fortified Green Zone and engaged in deadly clashes.
Finnish news agency STT reported that the Finnish embassy, which is in part of the same enclosure as the Swedish, had also been evacuated but that staff were safe and unhurt.
Several videos posted to the Telegram group, One Baghdad, showed people gathering around the Swedish embassy early today chanting pro-Sadr slogans and storming the complex about an hour later.
"Yes, yes to the Koran," protesters shouted.
Videos later showed smoke rising from a building in the complex and protesters standing on its roof.
By dawn, security forces had deployed inside the embassy and smoke rose from the building as firefighters extinguished stubborn embers, according to Reuters witnesses.
Iraqi security forces later charged at a few dozen protesters to try to clear them from the area.
Protesters had earlier briefly thrown rocks towards the large number of security forces gathered.
Sweden has seen several Koran burnings in recent years, mostly by far-right and anti-Muslim activists, with some of the burnings sparking clashes between police and protesters.
Recent burnings have caused outrage in the Muslim world and condemnation from Pope Francis.
The Swedish security services said such action left the country less safe.
Police rejected several applications earlier this year for protests that were set to include burning the Koran, citing security concerns.
However, courts have since overturned the decisions, saying such acts are protected by Sweden's far-reaching freedom of speech laws.
The speech laws are protected by the constitution and cannot be easily changed, but the government has said it is considering legal changes that would allow police to stop public burnings if they endanger security.
The burnings have also complicated Sweden's bid to join NATO.
While Turkey said this month it will ratify Sweden's application, previous burnings have angered Turkish President Recep Tayyip Erdogan.
Sweden's Prime Minister Ulf Kristersson has criticised the burnings and said that while they are legal, they are inappropriate.
