Iranian presidential election runner up Mir Hossein Mousavi on Wednesday renewed a demand for a complete re-run of the vote and pledged to help set up a new group to defend citizen's rights.
Another defeated candidate, Mehdi Karroubi, saw his reformist newspaper Etemad Melli shut down after he denounced the re-election of Mahmoud Ahmadinejad as invalid and the new government as not legitimate.
The 12-member Guardians Council election watchdog had warned the defeated candidates that it will brook no more challenges to the results following a recount of 10 per cent of ballot boxes from the June 12 poll.
Mousavi, Ahmadinejad's closest rival who won 34 per cent of the vote compared to 63 per cent for the incumbent, remained defiant, saying: "The majority of the society to which I belong will not recognise the legitimacy of the (future) government.
"Our historic duty is to continue the protests to defend the rights of the people... and prevent the blood spilled by hundreds of thousands of martyrs from leading to a police state," he said in a posting on his website.
Mousavi said a group of politicians including himself have decided to create "a legal political body to defend citizen's rights and votes that were crushed in the election, to publish documents about the frauds and irregularities and to start legal action."
Iran's police chief Esmaeil Ahmadi-Moghaddam said that 20 people were killed and more than 1,000 arrested in the wave of protests over the disputed presidential vote.
"No policeman was killed in the Tehran riots but 20 rioters were killed," he said, confirming earlier reports.
"Police arrested 1,032 people in the recent riots. Many have been released and the rest are being prosecuted in Tehran's public and revolutionary courts," he was quoted as saying by the Fars news agency.
The Paris-based International Federation for Human Rights has said that more than 2,000 people are in custody in Iran and hundreds more missing, while rights group Amnesty said it is concerned that several detained opposition leaders may face torture.
Human Rights Watch said harsh interrogation conditions and inadequate medical care are threatening the life of detained reformist Saeed Hajjarian, a former presidential adviser and Tehran city councillor.
Police chief Ahmadi-Moghaddam said the death of Neda Agha-Soltan, who became a symbol of post-election street rallies in Iran, was a "prearranged scenario," state owned English-language Press TV reported.
He accused Arash Hejazi, a doctor who says he tried to save Neda's life in her final moments, of fanning the flames of the western media hype, the TV station said on its website.
White House spokesman Robert Gibbs dismissed Ahmadi-Moghaddam's allegation as "misinformation."
"I think the notion that the death of an innocent woman would be staged is -- even with them, it's shocking," Gibbs said.
Ahmadinejad on Wednesday cancelled a trip to Libya, where he was due to have addressed a summit of African leaders in the seaside town of Sirte at the invitation of Libyan leader Moamer Kadhafi.
Pressure of work was blamed for the cancellation and it was impossible to know whether Ahmadinejad's pullout was connected with the wave of opposition which has swept Iran since the election, triggering the worst crisis since the Islamic revolution in 1979.
Foreign media remain banned from reporting from Iranian streets under restrictions imposed in the violent election aftermath.
Mousavi called for a guarantee of freedom of assembly, a free press, the lifting of bans on independent newspapers and websites and for the possibility to have "an independent television network."
The former prime minister also demanded the release of people arrested for "political reasons" and an end to "telephone tapping".
Etemad Melli said its publication was suspended on Wednesday as a direct result of Karroubi's latest statement.
"Last night, after Karroubi's statement was released, representatives of the Tehran prosecutor and the culture ministry prevented the publication of Etemad Melli newspaper," his party of the same name said on its website.
"They wanted the statement censored and not published -- so the newspaper will not be published today," it said.
Among people still held by the Iranian authorities is one local staff member from the British embassy out of nine who were detained on allegations of stoking the unrest, Press TV reported.
A British Foreign Office spokeswoman said: "The latest situation is two of our staff have been released over the last two days. We are also seeking confirmation that a further member of staff has been released today.
British Prime Minister Gordon Brown said the arrest of the nine embassy employees "is unjustified and it is unacceptable and some people in Iran are trying to seek to use Britain as an explanation for the legitimate Iranian voices calling for greater openness and democracy."
EU countries are considering a proposal from Britain for a temporary recall of all of their ambassadors from Iran in protest at the detention of the British embassy employees by Tehran, a European diplomatic source said.
A senior foreign policy advisor to Barack Obama said Iran's political crackdown and nuclear programme will be "at front and center" of the US president's visit to Russia and the G8 summit in Italy next week.
In a sign of life in Iran returning to normal, the text messaging network was restored on Wednesday after being cut off since June 12.