Iran challenged Azerbaijan on Tuesday over $1.5 billion in arms it said were purchased from arch-foe Israel, state media reported, in a sign of further strains between the neighbouring countries.

Azebaijan's ambassador to Tehran was called in to the foreign ministry to explain the weapons and to receive a warning that Israel must not be permitted to use Azerbaijan to stage "terrorist acts" against Iran.

Iranian news agencies reported that the ambassador, Javanshir Akhundov, acknowledged the arms purchase after getting confirmation from his government.

He explained that the weapons were bought "to liberate occupied Azerbaijani land," but did not elaborate, according to the reports.

The Iranian agencies quoted Akhundov saying that Baku "will not allow the weapons to be used against third nations, in particular the Islamic Republic of Iran."

The reports came a week after police in Azerbaijan said they arrested an unspecified number of people linked to Iran and to the Lebanese militant group Hezbollah on suspicion of planning attacks in the country.

On February 12, Iran accused Azerbaijan, which is mainly Muslim, of working with Israel's spy services and helping assassins who murdered Iranian nuclear scientists in recent years.

Baku has rejected as Tehran's claim as "slander".

Relations between Tehran and Baku have been tense for several months.

In January, Azerbaijan said it had detained two people allegedly linked to Iranian intelligence accused of plotting attacks.

And in October 2011, Iran accused its northwestern neighbour's security forces of shooting dead an Iranian border guard who had strayed into Azerbaijan.