Students called on President Khatami to intervene
Iran's supreme leader has said students involved in anti-government protests earlier this year should be treated with clemency.
Ayatollah Ali Khamenei was responding to a recommendation from two of his officials who deal with university affairs.
As many as 4,000 people were arrested in demonstrations centred on universities in June and July.
Ayatollah Khamenei's representatives urged him to show "Islamic compassion" to students who "have made it clear that they have not been part of any conspiracy".
They said some of the students became involved in protests out of "curiosity, because a dormitory was attacked, or because they had some demands as students", the Iranian Students News Agency reported.
Prosecutor General Ayatollah Abdolnabi Namazi said 40% of those arrested in the late June protests were freed immediately.
Parliament agreed in late June that the intelligence ministry would deal with the students who had been detained and that those facing charges would have open trials.
Four reformist legislators had held a sit-in demonstration at parliament to protest against the detention of the students.
The protests began on 10 June and led to severe clashes between students and vigilantes loyal to Ayatollah Khamenei.
In the capital Tehran - the focus of the unrest - 800 people were arrested.
Up to 4,000 people were arrested
They include Abdullah Momeni and Mahdi Aminzadeh, leaders of the biggest student organisation, the Unity Consolidation Office.
As well as criticising the conservative clerics, demonstrators also attacked the reformist President, Mohammad Khatami, who was accused of betraying hopes for change.
More than 100 student activists wrote an open letter to the president asking him to intervene to stop what they called "the policy of repression" which, they said, his continued presence in office would legitimise.
The students, who supported the reform movement and helped vote in Mr Khatami and the reformist majority of the parliament, have warned that they will be alienated from the system if their plight is ignored.
The Iranian protests attracted much support from liberal circles in Iran - as well as from US President George W Bush and UK Prime Minister Tony Blair.
But reformist members of the Iranian establishment joined the conservatives in strongly condemning the US and UK support for the demonstrations.