Iranian hardliners have rejected an electoral reform bill aimed at reversing its ban on liberal candidates, reformist MPs say.
Angry MPs are holding a sit-in against the ban in parliament
An emergency session of MPs voted on Sunday to overturn the ban of hundreds of candidates from the 20 February parliamentary election.
But the hardline religious Guardians Council is now reported to have vetoed the election bill.
Reformists have warned they may boycott the poll unless the ban is lifted.
"This indicates that the level of confrontation between the MPs and the Guardians Council continues and they (the council) don't want to accept any solution," reformist MP Reza Yousefian told Reuters news agency.
Under the bill put forward on Sunday, those approved for past elections would have been able to run again unless there was strong evidence to prove they were unfit.
IRAN'S REINS OF POWER
Supreme leader Ayatollah Ali Khamenei: Appointed for life, overrides all other authorities (pictured above)
Guardians Council: Half chosen by Khamenei, responsible for vetting election candidates and laws
President Mohammad Khatami: Elected for four years, power can be circumscribed by clerics
Parliament: 290 members introduce and pass laws, subject to approval
The Guardians Council, which vets candidates for office, set off what correspondents say is Iran's worst political crisis for years when it barred more than 3,500 mostly reformist candidates from the election.
It later reinstated about 350 of the nominees after Iran's supreme leader, Ayatollah Ali Khamenei, ordered a review.
But reformist MPs who dominate the legislature remain angry. Eighty of them were deemed unsuitable to seek re-election and a parliamentary sit-in against the council's decision is continuing.
Sunday's session of parliament, broadcast live on radio, classified the election bill as "triple-urgent".
This category is reserved for when parliament feels the basic rights of the nation are in serious jeopardy or the country is in great political or military danger, correspondents say.
It has not been used since the 1979 Islamic revolution.
The BBC's Miranda Eeles in Tehran says MPs hoped to add two clauses to the election law, effectively forcing the Guardians Council to reverse its rulings.
The first amendment would have allowed all sitting members of parliament or candidates approved for past elections to run for office unless legal documents proved their incompetence.
The second was aimed at eliminating politically motivated disqualifications by requiring the Guardians Council to approve anyone deemed by local trustees to be loyal to Islam and the ruling Islamic establishment.
President Mohammad Khatami and senior officials have spoken out over the row.
Having appealed for calm while others were threatening mass resignations, Mr Khatami hardened his line on Saturday.
He issued a joint statement with parliamentary speaker Mehdi Karrubi demanding that the Guardians Council make a "full review" of their blacklist.
They said the disqualifications and ensuing furore were "against the dignity of the noble Iranian nation", but stopped short of calling for an election boycott.
The Guardians Council has promised to check all the disqualifications and issued revised judgements by 30 January.