Iran's top legislative body is ready to recount a random 10 percent of the votes in last week's disputed presidential election, state television said on Saturday.
The news comes amid conflicting reports on whether a protest rally planned against Iran's disputed presidential election would go ahead on Saturday, a day after the country's Supreme Leader demanded an end to such demonstrations.
An aide of defeated candidate Mehdi Karoubi as well as the wife of Mir Hossein Mousavi both said the rally would go ahead, although other reports said moderate clerics had called off the protests.
The semi-official Fars News Agency has quoted a senior commander saying the Iranian police will deal firmly with any illegal gatherings from now on.
"I should emphasise that all protests held in the past week were illegal and beginning today any gathering critical of the election would be illegal," deputy national police commander Ahmadreza Radan said.
He said the police would deal with the protests "firmly and with determination".
Tensions are high in Iran after Supreme Leader Ayatollah Khamenei ordered an end to the mass street protests that have shaken the establishment.
Ayatollah Khamenei said on Friday that last week's election was won fairly by President Mahmoud Ahmadinejad and not rigged, as defeated candidate Mir Hossein Mousavi alleges.
In a strong warning against the mass street protests, Mr Khamenei told the crowd at Friday prayers the protest leaders would be held directly responsible for any bloodshed.
"This extremism will reach a sensitive level which they will not be able to contain. They will be responsible for the blood, violence and chaos."
The BBC reports that the nightly rooftop chants of opposition in Tehran became louder than ever on Friday.
If the rallies do go ahead, ignoring the strongly-worded warning of the country's highest authority would be a direct challenge to Iran's leadership, BBC correspondents say.
The world is watching - Obama
United States President Barack Obama has toughened his comments in support of Iranian demonstrators, following a warning by Iran's supreme leader against further protests over the disputed presidential election.
Mr Obama says Iran must recognise that "the world is watching" and that how the country's government deals with those trying to be heard through peaceful means will "send a pretty clear signal to the international community about what Iran is and -- and is not".
The protests had surprised many, White House spokesperson Robert Gibbs said, and were "something extraordinary".
Despite assurances by top officials that Washington would not inject itself into the crisis, both houses of the US Congress have voted to condemn violence against demonstrators by the government of Iran.
State media have reported seven or eight people killed in unrest since the election outcome was published on 13 June. Scores of reformists have been arrested and authorities have cracked down on foreign and domestic media.
The human rights group, Amnesty International, says Ayatollah Khamenei's speech appears to give the green light for security forces to violently suppress further protests.
Backers of Mr Mousavi, who is President Ahmadinejad's main rival, will decide on Saturday whether to defy the Ayatollah's warning and stage another mass protest.
Council to meet presidential candidates
Iran's top legislative body, the Guardian Council, is meeting in extraordinary session on Saturday to hear their complaints about last week's poll.
There now appears to be no chance the result could be overturned.
The council has invited presidential candidates Mir Hossein Mousavi, Mehdi Karoubi and Mohsen Rezai to discuss more than 640 objections they have filed complaining about the poll.
Mr Mousavi has claimed that the ballot was rigged and called for the election to be rerun.
Hours after the Ayatollah's speech, the pro-reform cleric Mehdi Karoubi also called for the election result to be cancelled.
In another act of defiance after nightfall, Mr Mousavi's backers took to Tehran rooftops to shout Allahu Akbar (God is greatest), an echo of tactics in the 1979 Islamic revolution.
Attack on foreign interference
Speaking during Friday prayers at Tehran University, Ayatollah Khamenei attacked what he called interference by foreign powers who questioned the result of the presidential election that has sparked massive street protests.
He said Iran's enemies were targeting the legitimacy of the Islamic establishment by disputing the outcome of the election, won by incumbent Mahmoud Ahmadinejad with 63% of the vote.
Mr Khamenei described the election as a great display of democracy, and said the 85% turnout showed the trust the Iranian people have in the state.
Responding to allegations of electoral fraud, the ayatollah insisted the Islamic Republic would not cheat.
"There is 11 million votes difference," he said. "How can one rig 11 million votes?"
He hit out at what he called the arrogant powers, and media leaders in the US and some European countries who, he said, had shown their true faces.
He said the election was a "political earthquake" for Iran's enemies - singling out the UK as "the most evil of them" and accusing the British of trying to foment unrest in the country.
Britain said it had summoned the Iranian ambassador to complain about Mr Khamenei's speech, in which he also called the British "sinister". Germany's Chancellor Angela Merkel called the speech disappointing.