The government rejected protests by some Danish opposition parties that said banning Quran burnings would infringe on free speech.
The decision to appoint a commission met with immediate scepticism from several political parties, including the government's support party, the anti-immigration Sweden Democrats.
A Christian graveyard was also desecrated in the vicinity, residents and community leaders said.
Sweden's SAPO security service raised the terrorist alert from 3 to 4 on a scale from 1-5, reflecting a high threat.
Blasphemy is punishable by death in Pakistan and though no one has ever been executed for it, numerous accused people have been lynched by outraged crowds.
There is a misconception lying at the heart of the issue that is perhaps at the root cause of the problem, namely, that text desecration is “expression.”
Denmark is tightening border control due to security concerns after Quran burnings.
Sweden and Denmark have seen a string of protests in recent weeks, in which copies of the Quran were burned or otherwise damaged.
The UN General Assembly also adopted a resolution that condemns violence against holy books as a violation of international law.
The Swedish embassy in Baghdad faced the brunt of the outrage when it was stormed in protest.