TEHRAN: Iranian riot police fired tear gas and paintballs at protesters holding anti-government demonstrations in Tehran on Monday, websites and witnesses said, while an Iranian news agency reported that a gunshot killed a bystander.

The report by the Fars news agency said a number of people were also wounded by the gunfire and blamed the outlawed former rebel group, the People's Mujahedeen.

“The illegal gathering of seditionists, Monafeghin (hypocrites), monarchists and thugs in some streets caused the riots, but the presence of the people forced the elements of sedition and Monafeghin to leave,” the news agency said, using the regime's standard term of abuse for the People's Mujahedeen.

Police moved in when crowds of opposition supporters gathered in the capital's Azadi (Freedom) Square began chanting “Death to the Dictator!” a slogan used against President Mahmoud Ahmadinejad after disputed official results from a 2009 presidential election gave him a second term.

The website of opposition leader Mir Hossein Mousavi, kaleme.com, said that according to “unconfirmed reports, hundreds of protesters were arrested in Tehran.” There was no immediate official confirmation.

US Secretary of State Hillary Clinton hailed the “courage” and “aspirations” of the protesters and called on Iran to follow Egypt's example and “open up.”

"We wish the opposition and the brave people in the streets across cities in Iran the same opportunity that they saw their Egyptian counterparts seize in the last week," Clinton told reporters during a visit to the US Congress.

“We support the universal rights of the Iranian people. They deserve to have the same rights” as those demanded by Egyptian protesters whose 18 straight days of mass demonstrations prompted longtime US ally Hosni Mubarak to step down, she said.

The anti-government demonstrations, held despite a ban on rallies, were the first in Tehran since February 11, 2010, when activists took to the streets to mark the 31st anniversary of the Islamic revolution.

Opposition website Rahesabz.net said clashes were reported near Tehran University and on the road connecting Azadi Square with Enghelab Square.

It said police fired tear gas as protesters chanted “Ya Hossein, Mir Hossein” a slogan from 2009 in support of Mousavi.

Rahesabz.net also reported chanting against supreme leader Ayatollah Ali Khamenei, with shouts of “Ben Ali, Mubarak, It's your turn Syed Ali!” Popular revolts in Egypt and Tunisia led to the ouster of Mubarak and veteran strongman Zine El Abidine Ben Ali in the space of a month.

Websites and witnesses said thousands of opposition supporters had taken to the streets of Tehran in support of the Arab revolts despite a heavy police deployment.

Some set fire to rubbish bins while chanting slogans in apparent reference to Ahmadinejad.

Mobile phone services were cut and there were power blackouts in areas where the protests were taking place, witnesses said.

The authorities earlier surrounded the house of Mousavi to prevent him from attending the rally which regime-backers said was a cover for protests similar to those which shook the foundations of the Islamic republic in 2009.

Fellow opposition leader Mehdi Karroubi has been under de facto house arrest, according to his website Sahamnews.org, while Rahesabz.net reported that former reformist president turned opposition backer Mohammad Khatami's house was also cordoned off.

While Iran backed the uprisings in Tunisia and Egypt, the interior ministry banned the Monday rally planned by Mousavi and Karroubi.