Army Chief of Staff Gen. Sir Richard Dannatt stressed the decision would be kept under review, but said he hoped his statement would end the media speculation surrounding the prince's deployment.
"I would urge that the somewhat frenzied media activity surrounding this particular story should cease in the interests of the overall security of all our people deployed in Iraq," Dannatt said.
Clarence House, Prince Charles' London office, would not comment on the statement.
Dannatt's comments were broadcast on British Broadcasting Corp.
Harry, a second lieutenant, is a tank commander trained to lead a 12-man team in four armored reconnaissance vehicles. If deployed, he would become the first royal to serve in a war zone since his uncle, Prince Andrew, flew as a helicopter pilot in the Falklands conflict with Argentina in 1982.