UNITED NATIONS (Reuters) - Iraq's ambassador to the United Nations on Tuesday appeared to play down a dispute between Baghdad and Ankara over the deployment of Turkish troops in northern Iraq, saying bilateral talks between the neighbouring states to end the row were proceeding favourably.

"We are solving it between Baghdad and Ankara bilaterally," Iraqi Ambassador Mohamed Ali Alhakim told reporters after Russia raised the issue of Turkey's deployment during a closed-door meeting of the United Nations Security Council. "We have not yet escalated it to the Security Council or to the United Nations."

"For us, what is helpful is the bilateral discussion going on right now between Baghdad and Ankara, and it's going extremely well," he said, adding that Moscow had not consulted with Baghdad before raising the issue in the council.

But Alhakim reiterated that Iraq wanted the Turkish troops withdrawn from its territory immediately, saying the deployment was "illegal," and a violation of the United Nations charter.

Turkey has said the deployment was previously agreed with Iraq, a position U.S. Ambassador Samantha Power told reporters was also her understanding. Ankara says its troops are training Iraqi soldiers to fight Islamic State militants, who have seized territory in Iraq and Syria.

Russia is still seething over a Nov. 24 incident in which Turkey shot down a Russian plane near the Syria-Turkey border. Relations between Moscow and Ankara have nosedived since that incident, which diplomats said was the real reason Moscow raised the issue of the Turkish troops in Iraq.

Russia's U.N. Ambassador Vitaly Churkin said the discussion on Turkish military action in Syria and Iraq was helpful, though he suggested he was disappointed that the 15-member Security Council did not issue a statement reaffirming the principles of territorial integrity and national sovereignty.

"Our idea was to call the attention of the members of the Security Council to the situation," he said. "We believe that Turkey has acted recklessly and inexplicably, carrying out additional deployments on the territory of Iraq without the consent of the Iraqi government."

He suggested that the Turks were simply following the example of the U.S.-led coalition against Islamic State, which is conducting air strikes against the group on Syrian territory without the consent of the Damascus government.

Moscow has criticized the U.S.-led coalition for not seeking the permission of the government of Syrian President Bashar al-Assad, whom many Western and Gulf nations want ousted.

(Reporting by Louis Charbonneau; editing by Chris Reese, G Crosse)