Iran's leaders reacted angrily to US support of the protests
The US Secretary of State, Colin Powell, has said America should not get involved in Iran's internal politics.
In a radio interview, he said Washington should stay away from the "family fight" between the country's reformists and conservatives.
He also reminded listeners that Iran was a democracy and President Mohammad Khatami had been freely elected.
Washington upset Iran in June when President George W Bush welcomed a wave of protests against the country's religious leadership.
President Khatami was elected... not in an American kind of election but an election that essentially tapped into the desires of the people
US Secretary of State Colin Powell
The protests have since subsided and Mr Powell said in his interview that the United States should sit back and observe further developments.
He told the Washington radio station WMAL: "The best thing we can do right now is not get in the middle of this family fight too deeply.
"Remember that the president of Iran is freely elected. President Khatami was elected by his people, not in an American kind of election but an election that essentially tapped into the desires of the people."
Several thousand people took to the streets in cities across Iran to protest against the conservative clerical establishment and the reformist President Khatami, who is accused of betraying hopes for change.
At the time, President Bush described the protests as "the beginnings of people expressing themselves toward a free Iran", prompting an angry response from Iranian leaders.
Mr Powell stressed that Washington still had deep concerns about Iran, one of President Bush's "axis of evil".
But he added that it was best for the US to see if the protest movement would pressure Iran's political and religious leaders "to see whether this causes them to realise that they are going down a loser trail".