Bahrain said on Thursday it had recalled its envoy to Iraq after protesters stormed its embassy in Baghdad and took down its flag to protest a US-sponsored "workshop" in Manama on Palestine.
Some 200 protesters also burned a Israeli flag while hoisting the flags of Iraq and Palestine in a demonstration outside Bahrain's embassy in the Iraqi capital, a police official said.
"The Ministry of Foreign Affairs of the Kingdom of Bahrain condemns the attack on the Embassy of the Kingdom of Bahrain to the Republic of Iraq by the demonstrators (which) led to sabotage in the embassy building," said a statement on the ministry's website.
The government of Bahrain said it had "decided to recall its ambassador ... for consultations" and held Baghdad responsible for its embassy security, according to a statement from its official news agency.
Iraqi security forces broke up the rally and protesters could only enter the embassy courtyard.
On Friday, the Iraqi ministry of foreign affairs issued a statement on its website condemning the protesters' actions, saying it was committed to protecting foreign missions in Iraq.
It also said the Iraqi authorities had arrested several of the protesters, without specifying the number of those detained.
"We affirm our commitment to the inviolability of diplomatic missions, the need to ensure that their security is not threatened, and that the security of embassies are not violated," said the statement.
"We have arrested a number of the instigators … and have taken measures to protect the Bahraini embassy against any intrusion… and to prevent any breach of security," it added.
US President Donald Trump's son-in-law Jared Kushner on Wednesday launched a long-awaited Middle East initiative with a two-day conference in Bahrain, where leaders touted his plan to jumpstart Palestinians' economy.
But the Palestinian Authority boycotted the conference, accusing the unabashedly pro-Israel Trump administration of trying to force its solution on them.
On Wednesday, the Palestinian Liberation Organization (PLO) reiterated its rejection of the $50bn plan - part of a so-called “deal of the century” - saying the proposal's lack of political vision guarantees its failure.
The statement said the US wanted to sell a "mirage of economic prosperity" which would only perpetuate the Palestinians' "captivity".