BBC correspondent in Teheran
Iran's supreme leader Ayatollah Ali Khamenei has insisted parliamentary elections due later this month should go ahead as planned.
The supreme leader says the people should be able to vote
The government argues they should be delayed because conditions are not right for a free and fair election.
Mr Khamenei was speaking after talks between the hardline Guardian Council and senior politicians had failed.
The long-awaited announcement regarding his position came after a weekly cabinet meeting.
Iran's oil minister Bijan Namdar Zanganeh said Mr Khamenei had made it clear he wanted the polls to go ahead on the scheduled date of 20 February.
Government spokesman Abdollah Ramezanzadeh said it was hoped the two sides would reach a positive outcome over the election row by Thursday afternoon.
IRAN'S REINS OF POWER
Supreme leader Ayatollah Ali Khamenei: Appointed for life, overrides all other authorities (pictured above)
Guardian 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
That would allow them to hold the vote as planned.
Iran's interior ministry had asked the elections to be postponed after the conservative-dominated Guardian Council refused to reinstate thousands of pro-reform candidates.
The ministry has threatened to refuse to hold the poll, stating that when more than half the seats have no liberal contestants, the election could not be competitive, free or fair.
On Sunday, more than 120 members of parliament resigned in protest over the vote row.
There are signs of a compromise, however.
Lawmakers have reportedly said the Guardian Council will reinstate a number of reformist candidates.
But it is not clear if the deal will be enough to satisfy reformist MPs.
They have insisted that not only should all the bans be overturned, but also, the vote should be postponed to give all candidates enough time to conduct their campaigns.