Sports Ministeer Jasem Mohammed Jaafar said the government had sent clarification to the football federation because the old decision was vague and misinterpreted.
"We have done what we could. If FIFA doesn't reverse its decision and Iraq doesn't play in the World Cup, we won't be responsible," he said.
The Iraq team were in Thailand preparing to leave for Australia when FIFA announced its decision. Iraq coach Adnan Hamad said in Bangkok that the players were in a state of depression after learning of the ban.
"The decision is a big shock for the players," he said.
"Now we are awaiting for direction from the Iraqi Football Federation to know what to do. We are supposed to leave for Australia on May 27 but we will postpone that."
Australian officials said they were also hoping for a resolution so that Sunday's World Cup match would proceed.
Any cancellation would increase Australia's chances of making it through to the next stage of qualifying but the Football Federation of Australia (FFA) would lose about A$3 million ($2.88 million) in ticket sales and sponsorship.
"Our strong hope is the matter is resolved as quickly as possible and the two teams can meet on the field," the FFA's head of corporate and public affairs Bonita Mersiades Mersiades said. "In the meantime the Socceroos are continuing as if it's business as usual."
The Iraqi team provided their war-torn homeland with a rare moment of celebration in 2007 when they won the Asian Cup in one of sport's great modern fairytales.
