The ministry offered only vague details on the deaths and arrests in the town of Saqqez, which followed rioting and a gun battle elsewhere in Kurdish-dominated territories in July.
Iranian officials deny the rash of unrest on the western borders is ethnically motivated, but Kurdish leaders disagree, saying Tehran's discrimination towards their people was fomenting discontent.
The Interior Ministry website named the dead men in Saqqez as Mohammad Shariati, a 55-year-old retired teacher, and 18-year-old Farzad Mohammadi.
It did not say how the men died, although it confirmed shots had been fired. It quoted an unnamed senior official as saying police had denied firing their pistols.
"Regions historically occupied by Kurds ... seem to suffer disproportionate inadequacy of services such as water and electricity and unsatisfactory reconstruction efforts"
"Public and state-owned buildings, including banks, were damaged," the official said on the web site, without explaining how the damage had been caused.
Tehran is very sensitive about any suggestion of ethnic unrest, particularly by its Arab and Kurd populations, and anti-government demonstrations are usually dealt with quickly.
Iran is home to about 6 million Kurds, and its 67 million population is an ethnic patchwork. Roughly half the population is Persian, with the other 50% made up of Azeris, Kurds, Arabs, Lors, Baluch and Turkmen.
The Sharq daily quoted Deputy Provincial Governor Alireza Jamshidi as saying 100 of those arrested had been released.
Kurds had rioted in the town of Mahabad last month after police shot dead a young Kurdish man. Shortly afterwards, three Iranian policemen were killed in a gun battle with Kurdish separatists.
A UN report last month had suggested Tehran was discriminating against its religious and ethnic minorities in the allocation of basic amenities.
"Regions historically occupied by Kurds ... seem to suffer disproportionate inadequacy of services such as water and electricity and unsatisfactory reconstruction efforts," the report read.