TEHRAN - Iranian opposition supporters staged a defiant rally against President Mahmoud Ahmadinejad's re-election on Monday, with his defeated rival set to appear in public for the first time since the vote triggered the worst unrest in a decade.

A Iranian riot police officer sprays tear gas at a supporter of defeated Iranian presidential candidate Mir Hossein Mousavi attacking him with a police stick during riots in Tehran. A tense Iran was gearing up for more street protests against the disputed re-election of President Mahmoud Ahmadinejad after authorities banned a nationwide march by his defeated rival. (AFP/File/Olivier Laban-Mattei) Iran's supreme leader has also ordered the country's top election supervisory body to look into the complaints raised by former premier Mir Hossein Mousavi, who has branded Friday's election a vote-rigged "charade."

Mousavi, a moderate who lost by a wide margin to the hardline Ahmadinejad, is planning to attend the march despite a ban, his website said, setting the stage for possible confrontations with security forces.

Supreme leader Ayatollah Ali Khamenei however told Mousavi to pursue his complaints against the most hotly-disputed election in the Islamic republic through legal and peaceful means, state television reported.

Mousavi's website had said the rally would go ahead despite a ban ordered by the authorities, which have come under fire from governments across the world and rights groups for their crackdown on opposition protesters.

"No authorisation for a march or gathering has been issued and any kind of gathering or march is illegal," an interior ministry spokesman said.

But hundreds of people were gathering in the streets of Tehran on Monday in defiance of the ban.

Mousavi lodged a formal appeal on Sunday for the cancellation of the election results that have brought to the fore deep divisions in Iran after three decades of Islamic rule.

"You should follow the matters peacefully," the television quoted the supreme leader as telling Mousavi, a moderate 67-year-old who mounted a spirited campaign that appeared to have huge support among Iran's urban youth.

Khamenei said the 12-member Guardians Council had been advised to "precisely examine" Mousavi's letter. A spokesan for the body said it would announce its decision in 10 days.

Monday's opposition demonstration comes a day after Ahmadinejad himself addressed a victory rally of vast crowds of supporters in Tehran to defend his victory.

"Elections in Iran are the cleanest," he said. "Today, we should appreciate the great triumph of the people of Iran against the united front of all the world arrogance (the West) and the psychological war launched by the enemy."

The authorities have warned that they would crush any "velvet revolution" in Iran and police said they have rounded up 170 people over the protests, including a number of reformist leaders.

Relatives of those arrested protested outside Tehran's main revolutionary court. "You can beat us as much as you can, but take us to our children," shouted a woman as a policeman nearby was beat a man in order to disperse the crowd of around 200.

Riot police on Sunday fired into the air to break up a demonstration, while about 200 Mousavi supporters shouting "Death to the dictator!" lobbed stones at police who fired back with tear-gas.

On Saturday, Tehran witnessed widespread clashes between baton-wielding police and stone-throwing protestors who set bins and vehicles on fire in violence on a scale not seen since 1999 when student demonstrations led to a week of deadly nationwide unrest.

The election campaign, unprecedented in its fervour with mass carnival-like street rallies and the hurling of insults between candidates, appears to have galvanised a grass-roots push for change.

But it highlighted deep divisions in society, with Ahmadinejad commanding massive backing in the rural heartland and among the poor, while Mousavi gained ground among the urban youth calling for a less confrontational stance towards the West and easing restrictions in society.

US Vice President Joe Biden said on Sunday there was "an awful lot of doubt" about the vote, but nevertheless reiterated Washington's willingness to engage in talks after three decades of severed ties.

Washington has extended a hand for dialgoue with Tehran since President Barack Obama took office in January.

Amnesty International called for the Iranian authorities to immediately investigate the crackdown on demonstrators.

"The shocking scenes of violence meted out by the security forces need to be urgently investigated and those responsible for human rights violations must be brought to justice," it said.

Iranian analysts have warned that the disputed nature of Ahmadinejad's victory could weaken Iran from within and isolate it further from the outside world.

"The perception of many Iranians that their vote was not taken into consideration will weigh heavily on the legitimacy of future elections," said Tehran-based analyst Sayeed Laylaz.

Ahmadinejad's first term in office set Iran on a collision course with the international community over its nuclear drive, his anti-Israeli tirades and restrictions on society.

And Israeli Defence Minister Ehud Barak, on a visit to France, said Ahmadinejad's win was "bad news."

"I am not sure if the results reflect the real will of the Iranian people," he told journalists.