Speaking before the United Nations Security Council at a meeting on the crisis in Iraq, Araghchi said that Israel's actions in Gaza can "only be called genocide," and said that such actions were a rallying cry for Islamic State.
The group's demise must thus be tied to "an end to the Israeli occupation of Arab lands," he said.
US Secretary of State John Kerry chaired the four-hour meeting, and was present for the Iranian minister's comments.
Araghchi said that his government was in agreement with Western powers on the insidious nature of Islamic State, an extremist organization seeking a caliphate through Iraq and the Levant: "we couldn't agree more that ISIL [Islamic State] is neither Islamic, nor a state," he said.
While the minister said that "consistency" was required in pursuing the group militarily, such actions required the consent and cooperation of host governments, he said, in a reference to the Syrian government.
The Obama administration has warned of pending strikes in Syrian territory on Islamic State assets, but refuses to coordinate with the government of embattled Syrian President Bashar Assad.
"Adventurous military and non-military interventions in the region," Araghchi continued, "have helped radicalize youths." Extremism in the region has risen steadily since 2001, he said, when the United States began the war on terror, and 2003, with the invasion of Iraq.
Kerry said at the meeting that Iran had a role to play in a global coalition to tackle Islamic State.
"The coalition required to eliminate ISIL (Islamic State) is not only, or even primarily, military in nature," Kerry said.
"It must be comprehensive and include close collaboration across multiple lines of effort. It's about taking out an entire network, decimating and discrediting a militant cult masquerading as a religious movement," he said. "There is a role for nearly every country in the world to play, including Iran."
Reuters contributed to this report.