Iranian forces crossed into neighbouring Iraq and killed 30 fighters from a group Tehran said was involved in last week's bombing of a military parade, state TV reported.
General Abdolrasoul Mahmoudabadi of the elite Revolutionary Guards told the TV that the "terrorists" were killed in a clash on Saturday "beyond the border" and that his forces were still in pursuit of two men who escaped the ambush.
While Iran has said in the past it would target armed groups on Iraqi soil, this is a rare case of it actually admitting to an attack.
Iraqi officials complained in the past about Iranian artillery shelling its northern mountainous region where armed Kurdish opposition groups have taken refuge.
An explosion during a military parade in the town of Mahabad, in Iran's northwestern Kurdish region, killed 12 women and children on Wednesday.
Iran has already blamed the attack on Kurdish separatists who fought Iranian forces in the area for years, but most Kurdish groups condemned the attack and no one has so far claimed responsibility for it.
Iran has also blamed Israel, the US and supporters of Iraq's previous regime for supporting the Kurdish groups.
The parade was one of several held around the country to mark the 30th anniversary of the start of the Iran-Iraq war.
The city of Mahabad is home to 190,000 people - most of them Kurds and Sunni Muslims. Iran is predominantly Shiite.