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TEHRAN (Reuters) - Hundreds of pro-government and pro-opposition students staged rival rallies in Tehran on Tuesday, and the capital's bazaar briefly closed down in protest at an "insult" to the Islamic Republic's founder.
The incidents, reported by official media and a reformist Web site, were another sign of tension rising in Iran once again six months after a disputed election that plunged it into its worst internal crisis since the 1979 Islamic revolution.
The authorities called for a nationwide rally on Friday to condemn the tearing up of a picture of late revolutionary leader Ayatollah Ruhollah Khomeini during opposition protests last week, a government body said in a statement.
Such an event could turn violent as the opposition has used state-sponsored demonstrations before to take to the streets.
"Death to America" and "Death to hypocrites," chanted government supporters who gathered at a branch of Azad University, the official IRNA news agency reported. "Hypocrites" referred to senior opposition figures.
"Death to the dictator," shouted pro-reform students at the women-only al-Zahra University, according to the Kaleme website of opposition leader Mirhossein Mousavi, who says the June election was rigged in President Mahmoud Ahmadinejad's favor.
Government officials have accused Mousavi's backers of desecrating Khomeini's memory during December 7 demonstrations, when police armed with batons and tear gas clashed with students.
The opposition has denied involvement in the reported incident, suggesting the authorities were planning to use it as a pretext for a renewed post-election crackdown on dissent.
Hardline clerics and other leadership loyalists have held many rallies over the last few days to vent their anger at the "insult" to Khomeini, who led the overthrow of the U.S.-backed shah and remains revered 20 years after he died.
The bazaars of Tehran and the northwestern city of Tabriz shut down for a few hours on Tuesday over the picture incident, state television reported.
Rejecting accusations that they had desecrated Khomeini's memory, reformist students have responded with their own gatherings this week, reformist websites said. Students form the backbone of the reform movement in Iran.
At al-Zahra University, pro-opposition students asked, according to Kaleme: "Where are you Khomeini? Mousavi is alone."
Mousavi was prime minister during the 1980s and has called for a return to the "fundamental values" of the Khomeini era.
Referring to fellow students detained in Tehran's main jail after the June election, the students chanted: "Iran has turned into a detention center. Evin prison has become a university."
Hardline students at the university ended their rally when they encountered "the angry" opposition supporters, Kaleme said.
The official IRNA news agency gave a different picture of events at Azad University, saying pro-government students there outnumbered Mousavi supporters by a wide margin.
It said 700 students protested against the insult to Khomeini. About 100 pro-reform students gathered nearby but their rally lasted only for a short time, IRNA said.
It was impossible to independently verify the conflicting claims as Iranian authorities have banned reporters working for foreign media organizations from leaving their offices to cover protests.
Security forces have repeatedly warned that any "illegal" opposition gathering would be firmly confronted.
The June vote exposed deepening establishment divisions in the major oil producer, which are showing no signs of narrowing.
The authorities have rejected opposition charges of vote fraud and portrayed huge pro-Mousavi protests that erupted after the poll as a foreign-backed bid to undermine the Islamic state.
Last week's student protests were much smaller than those in the days after the election. But the mood seemed more radical with demonstrators chanting slogans against the clerical leadership and not just criticizing Ahmadinejad's victory.
Thousands of Mousavi supporters were detained after the vote, including senior reformers. Most have been freed but over 80 people have received jail terms of up to 15 years and five have been sentenced to death over the post-vote unrest.
Editing by Jon Hemming