"Stability and security of the region have always been of high importance to Iran," he said in a meeting with a visiting politico-economic delegation headed by Iraqi Prime Minister Adel Abdul Mahdi, the presidential website reported.
The already volatile Middle East has been experiencing heightened tensions in recent months due to heightened friction between Iran and the United States over the 2015 nuclear deal.
Washington last year abandoned the deal and reimposed sweeping sanctions on Iran that initiated its reciprocal plan in May by gradually reducing its nuclear commitments as other parties failed to uphold its economic interests, according to Financial Tribune.
A series of events, including several attacks on oil tankers in the Persian Gulf, Iran's downing of a US drone near the Strait of Hormuz and Washington's planned airstrike that was called off shortly before impact have led to a dramatic escalation, raising fears of a serious conflict in the region.
"The Islamic Republic of Iran has never sought to increase tensions in the region or with other countries and will never be the initiator of war and tension," Rouhani said during the meeting.
He stressed that Iran has always been and will remain the main guardian of security and free shipping in the Persian Gulf, the Strait of Hormuz and the Sea of Oman.
Offer of Mediation
Iraq, an ally of both countries, has offered to mediate between Tehran and Washington by holding a regional conference, as it is determined to prevent its territories from becoming a battleground.
"The region is not prepared for a new war. We are still fighting terrorism. It is an unfinished war," Iraq's Foreign Minister Mohamed Alhakim recently said.
Rouhani expressed interest in cooperation with the neighboring country to establish peace in the region.
"While the required sustainable stability and security have not been achieved in the region yet, developing multifaceted Tehran-Baghdad relations will definitely be effective," he said.
The Iraqi premier said Baghdad is committed to implementing the agreements reached between the two countries over the past year to smooth the way for closer interaction.
"Iraq has never been and will never be engaged in anti-Iran sanctions," he reassured.
Abdul Mehdi said mutual visits by officials to Baghdad and Tehran have produced practical outcomes and the government of Iraq welcomes and supports collaboration between the two countries' investors and entrepreneurs.