Four protesters have been killed amid violence between anti-government crowds and police in Iran's capital, Tehran.
Opposition sources said the nephew of former presidential candidate Mir Hossein Mousavi was among those killed when police opened fire.
A senior police official said three people had died in accidents, the fourth was hit by a bullet, but police were not carrying weapons.
Opposition websites also reported four deaths in Tabriz, north-western Iran.
There is no confirmation.
It is almost certainly the worst loss of life in protests since the disputed result of June's presidential election sparked days of clashes.
On Sunday, opposition parties had urged people to take to the streets as the Shia Muslim festival of Ashura reached a climax.
People were chanting "Khamenei will be toppled", opposition sources said, a reference to Iran's Supreme Leader.
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Thousands of demonstrators are reported to have taken part in the protests, in defiance of official warnings.
Initial reports from Tehran said the security forces fired in the air to disperse the protests.
Police sources, quoted by the Iranian Fars news agency, denied this, saying foreign media were exaggerating reports of unrest.
But state television later acknowledged there had been several fatalities, and Iranian police said they had arrested 300 people in Tehran.
Iran's deputy police chief Ahmad Reza Radan, speaking on state television, said the death of the person hit by a bullet was being investigated.
Of the other three fatalities in Tehran, according to Mr Radan, one had fallen off a bridge and the other two had died in car accidents.
Although there were deaths in the immediate aftermath of the disputed elections and protests in June, fatalities since then have been rare.
Mr Mousavi was at the hospital where his nephew Seyed Mousavi was taken after being fatally shot in the heart at Enghelab Square.
| ANALYSIS  Jon Leyne, BBC News Tehran correspondent The opposition hoped for a massive day of demonstrations, and they have managed that beyond their expectations. Despite attempts by the security forces to disperse them, the protesters eventually took over a large section of central Tehran, leaving the police watching from the sidelines. And there are similar reports from across the country. For much of the morning there was a series of violent confrontations. Witnesses described how opposition supporters attacked the police with their bare hands, and the police eventually opened fire directly on the crowd. The size of the demonstrations, and the death of a number of protesters, could dramatically change the nature and the intensity of the confrontation. But neither side has a clear strategy of what to do next. The opposition is leaderless. The government is still pretending there are just a handful of troublemakers. From day to day, it is not clear how the crisis will develop. |
The security forces clearly have to tread a fine line between not appearing weak but also not provoking opposition protesters, says Siavash Ardalan of BBC Persian TV.
Police helicopters were seen flying over central Tehran as clouds of black smoke billowed into the sky, reports said.
On the ground, the security forces clashed with protesters trying to reach central Enghelab Square, witnesses said.
Protesters were chanting, "This is the month of blood", and calling for the downfall of Iran's Supreme Leader Ayatollah Ali Khamenei, according to opposition websites.
At the same time, crowds of pro-government demonstrators marched on Enghelab Street to voice support for Ayatollah Khamenei, witnesses said.
Protests were also reported in the cities of Isfahan and nearby Najafabad.
The French foreign ministry said it condemned the "arbitrary arrests and the violent actions committed against simple protesters who came to defend their right to freedom of expression and their desire for democracy."
The French government has continued to lobby the Iranian authorities to release a French university lecturer who was charged with spying during the election. Clotilde Reiss remains in Tehran, and last appeared in court on 23 December.
Disputed election
Tensions have risen in Iran since influential dissident cleric Grand Ayatollah Hoseyn Ali Montazeri died a week ago aged 87.
Supporters of opposition leader Mir Hossein Mousavi have sought to use Shia religious festivals this weekend to show continued defiance of President Mahmoud Ahmadinejad's government.
 There were chaotic scenes as forces and protesters clashed |
Denied the right to protest, the opposition chose the highly significant festival of Ashura when millions of Iranians traditionally go onto the streets for ceremonies and parades, BBC Tehran correspondent Jon Leyne says.
The festival mourns the 7th Century death of Imam Hussein, a grandson of the Prophet Muhammad.
Iranian television had live coverage of the Ashura ceremonies, including those in Tehran attended by President Ahmadinejad.
Mr Mousavi came second in the June election, and anger at the result saw mass protests in Tehran and other cities that led to thousands of arrests and some deaths.
Mr Mousavi has said the poll, that returned Mr Ahmadinejad to power, was fraudulent.
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