European Union interior ministers dropped calls for the bloc to take in more Iraqi refugees after Iraq's prime minister said his government was trying to convince refugees to return home to help Iraq rebuild.

The UN Refugee Agency (UNHCR) estimates 2 million Iraqi refugees are living abroad, mostly in neighbouring Jordan and Syria. More than 2.5 million are internally displaced. The UNHCR has long lobbied the EU to take in more Iraqi refugees.

German Interior Minister Wolfgang Schaeuble had urged European countries in April to do more to provide shelter to Christians among the refugees who have fled to Iraq's neighbours to avoid ethnic strife after the 2003 war.

But Iraqi Prime Minister Nuri al-Maliki, on a visit to Berlin earlier this week, urged Germany to abandon this initiative, Schaeuble told reporters.

"They (the Iraqi government) campaigned for us in the EU not to take additional initiatives which would be counterproductive to their efforts," Schaeuble said.

Maliki had stressed the security was better and Iraq was working on convincing refugees to come back, adding that refugees were needed to rebuild the country, Schaeuble added.

An EU statement agreed on Thursday said the priority was to create the conditions allowing refugees to go back home and noted that some EU countries have taken in refugees, without calling other countries to do the same.

In Berlin, Maliki invited German firms to invest in his country, saying the security situation had improved sufficiently.