Iran is the main foreign backer of Syrian President Bashar al-Assad and its presence has been one of the most contentious issues looming over the first talks attended by Mr Assad's government and opponents, which are due to start tomorrow in Switzerland.
Adding to dark clouds over the talks, Mr Assad said he might seek re-election this year, effectively dismissing any talk of negotiating his departure from power, his enemies' main demand.
Mr Ban's invitation appeared to catch Western powers off guard. America and France said Iran was not welcome at the talks unless it publicly backed an accord reached in Geneva in 2012 that calls for a transitional government for Syria.
US State Department spokeswoman Jen Psaki said: "This is something Iran has never done publicly and something we have long made clear is required. If Iran does not fully and publicly accept the Geneva communique, the invitation must be rescinded."
Syria's main political opposition group, the National Coalition, which had agreed to attend the conference, known as Geneva 2, only days ago, said it would now pull out unless Iran's invitation was withdrawn.
Ahmad Ramadan, a senior member of the Coalition, said the opposition was "suspending" its participation because Iran had been invited.
He added: "We consider Iran a country that is invading Syria and sending militias. If the situation does not change, the Coalition will not be at the talks."
Mr Ban said he had issued the invitation after Iran's foreign minister Javad Zarif told him Tehran agreed to accept the 2012 accord, as demanded by the West.
But Iran said it would attend the talks without having accepted any preconditions.