A committee -- set up by the conservative-dominated Iranian parliament to vet candidates for the municipal elections -- has disqualified the former Iranian interior minister, Abdullah Nouri, and more than fifty other moderates from running.
The announcement has been condemned as illegal by the interior ministry, which is under the control of President Khatami, and has its own committee to vet candidates.
The interior ministry has threatened to accept the supposedly disqualified candidates for the Teheran region.
The BBC Middle East correspondent, who's in Teheran, says that with two groups disputing the right to have the final say, there are reports that a special committee, including Mr Khatami himself, may be set up to adjudicate.
From the newsroom of the BBC World Service
Country profiles
Safety chief deplores crash speculation
Iraq oil-for-food aid extended
Israel demands soccer sex scandal inquiry
Israeli PM's plane in accident
Jordan police stop trades unionists prayers
New Israeli raid in southern Lebanon
New demand over PLO terror list
Earthquake hits Iran
New UN decision on Iraq approved
Algerian president pledges reform