Iranian security forces clashed with opposition supporters on Thursday when huge crowds flocked to central Tehran to mark the 31st anniversary of the Islamic revolution.
State television showed live footage of hundreds of thousands of people, some carrying Iranian flags and pictures of Supreme Leader Ayatollah Ali Khamenei, walking to Azadi (freedom) Square in central Tehran.
An Iranian opposition website, Iran's Green Voice, said security forces fired shots and teargas at supporters of opposition leader Mirhossein Mousavi staging a rally in central Tehran.
The opposition website Jaras said security forces attacked opposition leader Mehdi Karoubi and moderate former president Mohammad Khatami when they attended the rally.
The reports could not be verified independently because journalists working for foreign media were escorted to Azadi Square and are not at liberty to cover opposition rallies.
Neither side has shown much appetite for compromise in the eight months since the disputed June presidential vote, which the opposition says was rigged to secure Mahmoud Ahmadinejad's re-election.
The Islamic state is facing its worst domestic crisis in three decades as opposition supporters have rallied round the reformists who lost to Ahmadinejad in the election.
Iran faces growing Western calls for targeted sanctions against it after Ahmadinejad ordered production of higher-grade uranium, stirring fears that Tehran aims to make nuclear bombs, not just fuel for civilian use as it says is the case.
Ahmadinejad told the flag-waving crowd in central Tehran that Iran had produced its first consignment of 20 percent enriched uranium, and could enrich uranium to much higher levels at its Natanz nuclear plant.
Production of higher-grade uranium will be trebled in the near future, he added. Iran announced it had started making higher-grade atomic fuel two days ago.
The West accuses Iran of covertly trying to build nuclear bombs. Iran, the world's fifth-largest crude exporter, says its nuclear facilities are part of a peaceful energy programme and has said it would retaliate for any attack on them.
Israel sees Iran's nuclear programme as a threat to its existence and has not ruled out military action if diplomacy fails to resolve the dispute over uranium enrichment.
Ahmadinejad said on Wednesday that if Israel embarked on military action in the region, it should be resisted and "put an end to", state television reported on Thursday.
The Islamic Republic does not recognise Israel, which it refers to as the Zionist regime.