* EU raises "serious concern" at protest handling
* Calls on Tehran to refrain from use of force
* Steps up demand for election investigation
By David Brunnstrom
BRUSSELS, June 19 (Reuters) - European Union leaders condemned Iran’s handling of protests against its disputed election on Friday, urging Tehran to refrain from violence and to launch an investigation into the staging of the poll.
Iranian state media have reported seven or eight people killed in protests since results published on June 13 showed a landslide victory for Mahmoud Ahmadinejad. Scores of reformists have been arrested and authorities have cracked down on media.
"The European Union is observing the response to the protests across Iran with serious concern," the EU leaders said in a joint statement after a summit in Brussels.
"It firmly condemns the use of violence against protesters resulting in loss of lives...the authorities should refrain from the use of force against demonstrators."
The statement stressed the importance of Iran engaging with the international community, especially over its disputed nuclear programme, which the West suspects is aimed at producing atomic weapons and Tehran says is entirely peaceful.
Iran’s Supreme Leader Ayatollah Ali Khamenei on Friday demanded an end to street demonstrations that have shaken the country since the disputed election a week ago and said any bloodshed would be the fault of protest leaders.
German Chancellor Angela Merkel said the speech, in which Khamenei attacked foreign powers for questioning the election results, was "disappointing".
While many European countries and international human rights organisations have criticised the election and its aftermath, U.S. President Barack Obama’s administration has muted its comments to keep the door ajar for possible dialogue.
"We don’t want to give the impression that foreigners ... are getting involved in the elections in Iran...but when you have to condemn, you condemn," said French President Nicolas Sarkozy, adding he understood Obama’s position.
British Prime Minister Gordon Brown said he wanted good relations with Iran as long as Tehran is "able to show to the world that its elections have been conducted fairly and that there is no unfair suppression of rights and of individuals".
Earlier this week, British Foreign Secretary David Miliband made clear doubts about the fairness of the election could have an impact on talks on Iran’s nuclear programme which involve France, Britain, Germany, the United States, Russia and China.
German Foreign Minster Frank-Walter Steinmeier said it was important to maintain dialogue with Iran and Germany still wanted to see Iran take part in a meeting of G8 foreign ministers due to take place in Trieste next week.
(Additional reporting by Ilona Wissenbach, Mark John and Adrina Croft)