The Iraqi government accuses Turkey of being behind the artillery shelling.
Prime Minister Mustafa al-Kadhemi called the shelling "a blatant violation" of Iraq's sovereignty.
He said, in unusually sharp terms, that Iraq reserves the right to strike back.
Iraq withdrew its Turkey chargé d'affaires for consultations.
Leaves condolences
In a statement, the Turkish Foreign Ministry extended its condolences to the Iraqi people and the government of the country.
Turkey is "ready to take any action to bring out the truth," they said.
Turkey launched an offensive in northern Iraq in April, aiming to strike at the Kurdish PKK guerrillas.