Mahmoud Ahmadinejad has repeatedly denied the Holocaust
The Iranian president's latest denial of the Nazi Holocaust has drawn strong condemnation from Western powers.
Speaking in the capital, Tehran, President Mahmoud Ahmadinejad said the Holocaust was "a lie based on an unprovable and mythical claim".
Germany said the comments were a "disgrace to his country" while the US said they would "isolate Iran further".
Mr Ahmadinejad made the remarks at an annual rally where opposition supporters clashed with police.
Reformists, who have been banned from holding demonstrations since disputed presidential elections in June, defied warnings not to use the pro-Palestinian Quds (Jerusalem) Day marches to stage protests.
'Unacceptable and shocking'
As part of the Quds Day events, President Ahmadinejad delivered a speech in which he repeated previous assertions that the Holocaust was a lie.
"The pretext [the Holocaust] for the creation of the Zionist regime [Israel] is false," he told worshippers at Tehran university.
"It is a lie based on an unprovable and mythical claim."
In reaction, White House Press Secretary Robert Gibbs cited President Barack Obama's assertion in a speech to the Muslim world that "denying the Holocaust is baseless, ignorant and hateful".
"Promoting those vicious lies serves only to isolate Iran further from the world," Mr Gibbs said.
German Foreign Minister Frank-Walter Steinmeier said: "This sheer anti-Semitism demands our collective condemnation.
"We will continue to confront it decisively in the future."
A French foreign ministry spokesman called the remarks "unacceptable and shocking", while British Foreign Secretary David Miliband said the denial was "abhorrent as well as ignorant".
"It is very important that the world community stands up against this tide of abuse," Mr Miliband said.
Meanwhile, Secretary of State Hillary Clinton warned Tehran that it also risked further isolation and economic pressure if it did not provide answers soon about its nuclear ambitions.
Western powers suspect Iran wants to develop nuclear weapons, though Iran insists its programme is purely to generate power for civilian uses.
UN Security Council powers and Germany are due to hold talks on the programme at the UN General Assembly next week.
The BBC's Kim Ghattas reports from Washington that despite Mr Ahmadinejad's Holocaust comments and Iran's disputed election, the US offer to engage diplomatically with Iran is still on the table.
Even so, the US ambassador to the UN said there would be no meeting between Mr Obama and Mr Ahmadinejad at the UN.
At the rally in Tehran, thousands of opposition supporters turned out, shouting slogans in support of defeated presidential candidate Mir-Hossein Mousavi.
Reports say there were clashes between police and protesters as the march progressed, with some arrests. Stones were thrown, and police used tear gas.
Iranian state-run channel Press TV showed footage of an opposition rally, with many supporters wearing green, the colour adopted by supporters of Mr Mousavi.
Mr Mousavi was forced to leave the rally after his car was attacked, the official Irna news agency reported, while former President Mohammad Khatami - also a reformist - was reportedly pushed to the ground and had his turban knocked off, before police intervened.