Argentina has complained that the man nominated for the post of defence minister in Iran's new government is wanted over a bombing in Buenos Aires in 1994, which left 85 people dead.
Alberto Nisman, the Argentine federal prosecutor, said on Friday that Ahmad Vahidi was accused of "being a key participant in the planning and of having made the decision to go ahead with the attack against the Argentine-Israeli Mutual Association".
"His nomination is very serious, given that Vahidi is a person who - as former head of Al-Quds - is deeply implicated with this attack," he said.
Iran has never acknowledged the existence of the Al-Quds Brigades, which is believed to be a covert operation branch of the Revolutionary Guards.
Ali Akbar Javanfekr, press adviser to Mahmoud Ahmadinejad, the Iranian president, dismissed the complaint, saying that he saw a "Zionist" hand in the outrage.
"How come didn't they bring it up in the past?" he asked.
"Mr Vahidi was a deputy defence minister and this is very senior political position.
"Therefore it seems that this is a new trick being planned and is basically a Zionist plot."
A warrant for Vahidi's arrest was issued by the international police organisation Interpol in November 2007.
The 1994 bombing was the second attack against a Jewish target in Buenos Aires in less than three years.
In 1992, the Israeli embassy was also levelled in a bombing that killed 22 people and wounded 200 others.
Argentina has the largest Jewish community in the Americas outside the United States.
Ahmadinejad is also facing opposition over several members of his new cabinet inside Iran with MPs complaining about their perceived lack of experience.