The European Union has demanded the immediate release of Iranian staff at Britain's embassy in Tehran detained on Saturday over post-election unrest.
EU ministers meeting in Greece warned that "harassment or intimidation" of embassy staff would be met with a "strong and collective" response.
Iranian media reported the detention of eight local staff at the UK mission over their alleged role in the unrest.
UK Foreign Secretary David Miliband dismissed the allegations as baseless.
Relations between the countries are strained since President Mahmoud Ahmadinejad accused the UK of stoking post-election protests, which London denies.
Iran has repeatedly accused foreign powers - especially Britain and the US - of meddling after the 12 June election, which officially handed Mr Ahmadinejad a decisive victory.
In the fallout from the crisis, Tehran expelled two British diplomats in the past week and the UK responded with a similar measure.
Speaking on the sidelines of a meeting of European foreign ministers on the Greek island of Corfu, Mr Miliband said: "The idea that the British Embassy is somehow behind the demonstrations and protests that have been taking place in Tehran in recent weeks is wholly without foundation."
Jeremy Bowen BBC News, Tehran
Iran's response to criticism from abroad of the violent response to the demonstrations has been to blame foreign powers for inciting and orchestrating violence. Britain has been singled out as the country most responsible for what has happened, aided by the BBC.
On Saturday President Ahmadinejad made a strong speech about what Iran claims has been foreign interference in the election. He said that his new government would have a more decisive and powerful approach towards the west.
The arrests fit into a pattern of deteriorating relations between Britain and Iran. Two British diplomats were expelled last week, and the British retaliated by expelling two Iranians from their embassy in London. It was never certain that would be the end of the matter.
In a later statement, the EU ministers said: "Harassment or intimidation of foreign or Iranian staff working in embassies will be met with a strong and collective EU response."
The arrests were first reported by Iran's semi-official Fars news agency.
"Eight local employees at the British embassy who had a considerable role in recent unrest were taken into custody," Fars said, without giving a source.
Some 17 people are thought to have died in street protests after the disputed presidential poll, which the opposition complains was rigged.
At least 1,000 opposition supporters are reported to have staged a noisy rally outside a mosque in Tehran on Sunday evening before it was broken up by police and militia.
Riot police used tear gas and clubs to disperse the crowd outside the Ghoba Mosque, Iranian eyewitnesses said.
The report could not be independently verified because of reporting restrictions on foreign media.
Rafsanjani breaks silence
Iran's powerful Guardian Council is due to rule on complaints about the presidential election by Monday.
Tehran has blamed the US and UK for post-election unrest
Mr Ahmadinejad's rivals have alleged massive fraud.
The BBC's Jeremy Bowen in Tehran says there is much politicking taking place behind the scenes, and that the five-day deadline for the Guardian Council to return its verdict may be extended.
The powerful former President, Akbar Hashemi Rafsanjani, has broken his silence on the election dispute.
Mr Rafsanjani, who heads two important organs of government, praised a decision by Supreme Leader Ayatollah Ali Khamenei to give the Guardian Council time to examine complaints by the three defeated candidates.
"This valuable move by the Supreme Leader in order to attract the people's trust towards the election process was very effective," Mr Rafsanjani said, according to Iranian news agencies.
"I hope those who are involved in this issue thoroughly and fairly review and study the legal complaints."
Opposition leader Mir Hossein Mousavi has not backed away from his claim that the election result was fraudulent, and has refused to support the Guardian Council's plan for a partial recount.
Mr Mousavi has been calling for a full re-run of the vote but said on Saturday that he would accept a review by an independent body.
However the Guardian Council has already defended President Ahmadinejad's re-election, saying on Friday that the presidential poll was the "healthiest" since the Iranian revolution in 1979.
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.