Mr Rowhani said such offenders would be "punished as corrupt of the earth who waged war against God" - a Koranic term for people whose crimes are deemed to warrant the death penalty.

A moderate conservative cleric closely allied with Majlis Speaker, Ali Akbar Nateq-Nuri, Mr Rowhani is also secretary of the Supreme National Security Council.

He said "opportunist enemies" supported by foreign powers had launched an attack on the very foundations of the Islamic system set up by Iran's late spiritual leader, Ayatollah Khomeini, after the 1979 Islamic revolution.

Mr Rowhani also said the unrest had targeted the system of "velayat-e faqih" - the theological foundation based on which the Iranian clergy wields political power.

His speech was interrupted by shouts of approval from the crowd and chants of "Death to counter-revolutionaries!" and "Death to hypocrites!"

The following are excerpts from Rowhani's speech, broadcast live on Iranian TV.

"During the past few days, the noble and heroic people of Tehran witnessed three bitter incidents:

"First, in the university's residential quarter, the students were insulted. This illegal move of attacking the university's residential quarter was contrary to regulations. The move was condemned by the esteemed leader [Ayatollah Ali Khamene'i], the honourable president [Mohammad Khatami], Iran's state officials and dear heroic nationalities...

"The Supreme National Security Council was put in charge of ascertaining the root causes of this event. As a first step, those responsible for the event were dismissed, reprimanded and punished. The individuals who had been arrested [without charge] were released and the people were compensated for their losses.

"Thanks to the condemnation of this bitter event, we renewed our respect for the precious and sagacious stratum of students. We shall identify and investigate the root causes of this problem and we shall inform you of the results.

"There were two more bitter events over the past few days:

"The enemies, who await in ambush, our opportunist enemies who have nothing to do with the university and have no links with our dear students, were trying to take advantage of the students' movement. Unfortunately, they succeeded and took advantage.

"Thugs and individuals affiliated to the isolated and bankrupt small groups, the mercenaries and agents of foreign powers tried to seize this opportunity. Of course, members of the groups had been waiting for such an opportunity for many months. They thought that at this historic juncture, they had found a good opportunity to realize their ominous and sinister objectives.

"The bitter developments, which followed the movement of these corrupt elements, offended our sanctities. You know that the enemy intends to create despondency and doubt among the people in order to pave the way for his own future.

"In pursuit of this objective, the enemy launched an onslaught on the foundation stone of the revolution's patriarchal structure. He broke the grace and sanctity of our revolutionary values. He attacked the foundation of the system and particularly the most essential pillar of the revolution, that is, the sacred sanctity of velayat-e faqih. The enemy wanted to pave the way for his future conspiracies.

"Our external and internal enemies should realize that our nation is aware and vigilant. Our people are ready in the arena.

"The issue of velayat-e faqih does not depend on individuals. The issue of velayat-e faqih in our country is the symbol of the system's Islamism. Our people know very well and understand that the enemy is unhappy with the Islamic nature of our system."

[Shouts of approval from the crowd]

"Our internal and external enemies know that Islam was the mighty power which stood up to all their conspiracies for over 20 years...

"Over the past few days, the people have tolerated the events like thorns in their eyes. This revolutionary patience was very interesting. The people maintained calm with vigilance, but were ready to take orders.

"Had the authorities not instructed our people, our Muslim, zealous and revolutionary youth to show patience, they would have torn these thugs and the mob to pieces."

[Shouts of approval; and "Death to counter-revolutionaries!" ...]

"We must maintain our readiness, vigilance and patience. The government and security officials are fully in control of the country's affairs. And these several dozens or several hundreds of thugs and small groups are not important enough to worry our people, the dear and heroic citizens of Tehran and our Muslim nation."

[Crowd chants "Death to hypocrites!"]

"The third bitter event included the raid on public assets, creation of panic and fear among the public, disturbance of calm and security, depriving the people of their peace of mind, tormenting of the people and even theft of the people's private property. Where else in the world would a government put up with riotous movements? These individuals are too insignificant to be interpreted here as planning to topple [the government].

"Well, we waited and showed patience in order to fully clarify the nature of this few hundred people. We wanted everyone to know who these people are and what their motive is.

"At this point, I deem it is necessary to thank our dear and heroic students. We appreciate their vigilance and alertness. As soon as they realized that these corrupt and repugnant elements had infiltrated their ranks, they immediately announced their disavowal and hatred. The students pulled back. This demonstrates the extent of our revolutionary Muslim and heroic students' vigilance and alertness.

"Two nights ago we received decisive instructions to deal with these elements. And at dusk yesterday we received a decisive revolutionary order to crush mercilessly and monumentally any move of these opportunist elements wherever it may occur."

[Shouts of support from the crowd]

"From today our people shall witness how in the arena our Law-Enforcement Force and our heroic Basij shall deal with this opportunists and riotous elements, if they simply dare to show their faces."

[More shouts of approval]

"The external enemies, who applauded these elements over the past few days, and the abject mercenary elements should know that Islam is alive in the country... The dear noble people of Tehran and the rest of Iran are alive and ready in the arena. The people enjoy the same might in the arena as they did in the years 1357-58 [1978-79] and shall give a tooth-crushing reply to the mercenaries."

"Fortunately, most of the culprits were arrested yesterday and last night. They will be questioned and interrogated. Among the arrested individuals one could find bandits, notorious criminals with long records, individuals affiliated to the hostile and bankrupt groups and others who had been fooled by some suspicious elements. They shall be named so that the people will know about them at an opportune moment.

"No doubt, those who have resorted to sabotage, destruction of public assets and violation of the state property will be tried in our relevant courts. They shall be punished as corrupt of the earth who waged war against God."