"Two hundred out of 344 arrested people have been released," Amir Khani, state prosecutor in Khuzestan's capital Ahwaz, said on Wednesday.
"The rest could be released on bail if their families pay. The main people responsible for the disorder number at least 10, and they will be strongly confronted by the judiciary."
During the violence, which began on Friday and continued until Sunday, groups of Iranian-Arabs smashed and set fire to police cars, banks and government offices and clashed with security forces who responded with tear gas and rubber bullets.
Officials say the unrest was sparked by the circulation of a forged letter in which a top government official discussed the idea of watering down Arab influence in Khuzestan by relocating more non-Arabs to this heartland of Iran's oil industry.
Only about 3% of Iran's 67 million population is Arab, but in some parts of the southwest they are a majority.
US State Department spokesman Adam Ereli called on Iran to "respect the peaceful exercise by the Iranian people of their democratic rights".
"The main people responsible for the disorder number at least 10 who will be strongly confronted by the judiciary"
Khuzestan state prosecutor
"Suppression of minority rights is ... to be denounced and it is not the first time that Iran has practised this kind of human rights violations," he said.
Iran's state radio described Ereli's comments as "interference" and accused Washington of shedding "crocodile tears" for Iran's Arab minority.
Different theories have been put forward by officials and politicians for the cause of the unrest, ranging from attempts to influence Iran's June presidential elections to foreign plots aimed at destabilising the Islamic Republic.
For Aljazeera's coverage of the unrest, Tehran closed down the Iran bureau on Monday, which the broadcaster said was regrettable and unwarranted.