Riot police blocked protesters from gathering in Tehran yesterday, witnesses said, as Iran's supreme leader warned he will not back down in the face of unrest following the disputed presidential vote.

"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 demonstrations and complaints that the June 12 election was rigged.

And in a sign security forces are wasting no time to put down protests, a large presence of riot police and Islamist Basij militiamen stopped a crowd of several hundred people trying to assemble outside the Iranian Parliament building, according to a witness.

Another witness near parliament reported seeing police charge at passers-by, who dispersed into nearby streets. Later in the evening a big squad of riot police remained deployed in the area, a source said.

In the latest diplomatic backlash over what Iran has branded Western meddling, Foreign Minister Manouchehr Mottaki said Tehran may 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 Ayatollah Khameini as the "most evil" of Iran's enemies - of plotting against the election and seeking to stabilise the country.

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 US, saying rioters were being funded by the CIA and the exiled opposition group the People's Mujahedeen. Iran has refused to overturn the results of the poll.

The authorities have also intensified a crackdown on opposition leader and defeated presidential candidate Mir Hossein Mousavi, with the arrest of 25 staff at his newspaper and vitriolic attacks from the hardline press.

Another defeated candidate, former Revolutionary Guards chief Mohsen Rezai, has withdrawn his protest about election irregularities, in a blow to the opposition.

"(Iran's) political, social and security situation has entered a sensitive and decisive phase, which is more important than the election," Mr Rezai said in a letter to the Guardians Council, the top election body.

Mr 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 has called for a mourning ceremony today for slain protesters.

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 last opposition rally on Monday was crushed by hundreds of riot police armed with steel clubs and firing tear gas.

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