Iran's Supreme Leader Ayatollah Ali Khamenei has said he supports a fuel price rise that has sparked protests across the country.
The Ayatollah blamed "hooligans" and counter-revolutionaries for violence that has been witnessed in several cities.
At least one person is confirmed dead in clashes with police but reports suggest the number could be higher.
Officials have warned of a tougher response if "illegal" actions continue.
Protests erupted on Friday after the government unexpectedly announced it was rationing petrol and removing subsidies – sending prices up by 50%.
The measures are the latest sign of pressure on the Iranian economy after the re-imposition of US sanctions. The government says the changes will free up money to help the poor.
What's the official reaction?
In a statement on Sunday, Ayatollah Khamenei acknowledged that some people were "no doubt worried" by the decision to increase fuel prices.
"But sabotage and arson is done by hooligans not our people," he said, quoted by state TV.
"The counter-revolution and Iran's enemies have always supported sabotage and breaches of security and continue to do so."
Following his comments a group of MPs withdrew a motion aimed at reversing the fuel-price increase, Iranian media reported.
Iran's state-run TV has accused "hostile media" of trying to exaggerate the scale of the unrest. Footage of protests has been widely distributed on social media.
What's the situation on the ground?
Internet monitoring service Netblocks said late on Saturday that Iran was experiencing a near-total national internet shutdown.
The move was condemned by US State Department spokeswoman Morgan Ortagus who tweeted: "We condemn the attempted shutdown of the internet. Let them speak!"
Prosecutors quoted by the semi-official Isna news agency on Sunday said 40 people were arrested in the central city of Yazd, most of whom were not local residents.
Some shops in Tehran's bazaar were shut on Sunday following "disruption" caused by people outside, Isna added without elaborating.
Some of the worst unrest has been reported in the central city of Sirjan where at least one person was killed during protests on Friday.
Demonstrations were reported on Saturday in the cities of Doroud, Garmsar, Gorgan, Ilam, Karaj, Khoramabad, Mehdishahr, Qazvin, Qom, Sanandaj, Shahroud and Shiraz, state media reported.
Video purportedly from the demonstrations showed cars set on fire and roads deliberately bloRead More – Source