President Mahmoud Ahmadinejad called the Holocaust a ''myth'' used by Europeans as a pretext for carving out a Jewish state in the heart of the Muslim world.
Ahmadinejad's comments were denounced in Germany which is sensitive to its Nazi past. Hitler's Nazi regime was responsible for the deaths of six million Jews in the Holocaust.
But Sepp Blatter head of soccer's world governing body said FIFA separates sports and politics.
''We're not going to enter into any political declarations'' Blatter told The Associated Press on Friday in Tokyo where he's attending the Club World Championship.
''There have been so many rants from heads of states even in Europe'' he said. ''We in football if we entered into such discussions then it would be against our statutes. We are not in politics.''
The calls to banish Iran from the event in Germany came mostly from the opposition Greens party although they had been supported by parts of the media and members of the country's ruling coalition.
''A country with such a president who is driving the country into isolation has nothing to do at the World Cup'' said Angelika Beer a Greens member of the European Parliament.
The leader of the Greens in Germany's parliament Volker Beck said Iran must be shown that ''this cannot go on and that it cannot remain without consequences.''
Social Democrats lawmaker Swen Schulz said the president's ''unbearable comments'' had ''endangered'' Iran's participation in the World Cup.
FIFA spokesman Andreas Herren said Iran will take part in the 32-nation tournament.
''FIFA strictly separates sports from politics'' he said.
Earlier this week Iran Foreign Ministry spokesman Hamid Reza Asefi said: ''It is a childish attitude to follow Zionist propaganda aimed at depriving the Iranian football team of its place on the pretext that Iran mixed up sports with politics.''
Iran coach Branko Ivankovic stressed that ''a time to make friends'' is the official World Cup motto.
''The best thing about sport is that it is completely apart from politics'' Ivankovic said. ''FIFA's official position has always been to ban any mixing of sports and politics.''
Iran has been drawn to play Mexico Portugal and Angola in Group D.
Yugoslavia was expelled from the 1992 European Championship following United Nations Security Council sanctions in 1992 and was prevented from entering qualifying for the 1994 World Cup. South Africa was prevented from playing international soccer games by FIFA from 1964-92 because of its apartheid policy.