Iran's supreme leader warned on Wednesday that the regime would not back down in the face of opposition protests over the disputed presidential vote, amid soaring tensions between Tehran and the West.
"In the recent incidents concerning the election, I have been insisting on the implementation of the law and I will be (insisting). Neither the system, nor the people will back down under force," Ayatollah Ali Khamenei said.
It was the latest indication that the clerical regime will not brook dissent over the re-election of President Mahmoud Ahmadinejad despite a wave of public protests and complaints that the June 12 vote was rigged.
In the latest diplomatic backlash over what Iran has branded Western meddling, Foreign Minister Manouchehr Mottaki said Tehran is considering whether to downgrade ties with Britain.
His comments came after the two governments expelled diplomats in a tit-for-tat move, with Tehran increasingly pointing the finger at London over the street violence that erupted in the aftermath of the election.
Tehran has accused Britain -- described by Khameini as the "most evil" of Iran's enemies -- of plotting against the election and fomenting the unrest.
It has expelled the BBC correspondent in Tehran and arrested a British-Greek journalist working for a US newspaper, one of at least two foreign reporters detained by the authorities.
Iran's interior minister also took aim at the United States, saying rioters were being funded by the CIA and the exiled opposition group the People's Mujahedeen.
US President Barack Obama, in his strongest comments yet, on Tuesday raised questions about the legitimacy of the election and expressed outrage over the violence against on opposition protesters.
Iran has refused to overturn the results of the poll but Khamenei -- who has ruled over the Islamic republic for 20 years -- has extended by five days a Wednesday deadline to examine vote complaints.
The authorities have also intensified a crackdown on opposition leader and defeated presidential candidate Mir Hossein Mousavi, with the arrest of staff at his newspaper and vitriolic attacks from the hardline press.
Tehran's streets remained tense but quiet on Wednesday, two days after the last opposition rally was crushed by hundreds of riot police armed with steel clubs and firing tear gas.
Another defeated candidate, former Revolutionary Guards chief Mohsen Rezai, has withdrawn his protest about election irregularities, in a blow to the opposition which has staged almost daily demonstrations since the vote.
"(Iran's) political, social and security situation has entered a sensitive and decisive phase, which is more important than the election," Rezai said in a letter to the Guardians Council, the top election body.
Mousavi, who was premier in the post-revolution era, has urged supporters to keep demonstrating but to use "self-restraint" to avoid further bloodshed while another defeated candidate Mehdi Karroubi called for a mourning ceremony on Thursday for slain protesters.
Police have arrested 25 journalists and other staff at Mousavi's Kalemeh Sabz (Green Word) newspaper -- which was shut down about 10 days ago -- one of its editors said.
Intelligence police said they had found "evidence of a plot against national security" at a candidate's campaign office used for "psychological warfare," the official IRNA news agency said, without identifying the candidate.
"Who is responsible for the week-long crime in Tehran?" charged pro-Ahmadinejad newspaper Vatan Emrouz above a front-page picture of Mousavi.
The Revolutionary Guards, the elite force set up to protect the Islamic republic, has warned of a "decisive and revolutionary" riposte to any further protests.
The foreign media is banned from reporting from the streets under tight restrictions imposed since the unrest was unleashed, but images of police brutality have spread worldwide via amateur video over the Internet.
Obama, who has called for dialogue with Iran after three decades of severed ties, said on Tuesday there were "significant questions about the legitimacy" of the poll but insisted Washington was not interfering.
"The United States and the international community have been appalled and outraged by the threats, the beatings, and imprisonments of the last few days."
Obama described as "heartbreaking" the shooting on a Tehran street of a young woman, Neda Agha-Soltan, whose death featured on an Internet video seen around the world and has become a poignant symbol for the opposition.
At least 17 people have been killed and many more wounded in the violence that has convulsed the nation since the vote, according to state media.
Many hundreds of protesters, prominent reformists and journalists have also been rounded up by the authorities, including some people close to top regime officials such as former president Akhbar Hashemi Rafsanjani.
The crisis is the worst in Iran since the Islamic revolution 30 years ago and has jolted the pillars of the clerical regime, with even some top officials raising concerns about the vote.
Analysts have also warned that oil prices could spike higher if the situation deteriorates in OPEC's second largest crude exporter.
The Guardians Council, a 12-member unelected body of Islamic clerics and jurists, insisted on Tuesday the election results would stand.
"We witnessed no major fraud or breach," spokesman Abbasali Kadkhodai said. "Therefore, there is no possibility of an annulment taking place."
However, Mousavi's campaign office released a report on "electoral fraud and irregularities" in the poll that gave him just 34 percent of the vote to 63 percent for Ahmadinejad.
It denounced what it said was "large-scale" official support for Ahmadinejad and spoke of ballot papers being printed on polling day without serial numbers, doubts about whether ballot boxes were empty when they arrived at polling stations and candidates' representatives being banned from vote centres.