The Iranian President, Mohammad Khatami, has called for further reforms of the Islamic republic and warned his hardline rivals that they are turning young Iranians against religion and the state.
In a speech to mark the 25th anniversary of the foundation of the Islamic republic the moderate cleric said the Islamic state would only survive by reforming.
Khatami's government has reluctantly agreed to stage parliamentary elections next week which reformists say have been rigged to ensure a conservative majority.
"Confronting people's wishes and ignoring people's demands in the name of religion... will only create disappointment among the young generation in the Islamic Republic and, God forbid, their religion," he said in an impassioned speech.
Addressing tens of thousands of people at an open-air ceremony in Tehran, Khatami promised to continue pressing for reform in the remainder of his second term which expires next year.
However, Khatami's relative impotence in the face of hardliners opposed to his efforts to promote greater democracy, justice and social freedoms in the country of 66 million has been highlighted by the recent electoral dispute.
A 12-man unelected watchdog dominated by religious hardliners has barred more than 2,500 candidates from standing in the February 20 vote, saying they were unfit to hold office.
Tens of thousands enjoyed a carnival-like atmosphere at the anniversary celebrations around Tehran's Azadi Square and joined in the traditional chants against the Islamic Republic's arch foes the United States and Israel .
A British Union Jack flag and several effigies of U.S. President George W. Bush were burned while helicopters tipped tinsel onto the crowd and hundreds of balloons in the national colours of red, green and white were released into the air.