The contest, which runs through 5 May, was launched in response to caricatures of Prophet Muhammad that were first published in a Danish newspaper in September and later reprinted in several European nations.
The caricatures caused widespread offence among Muslims and sparked protests, some violent, across much of the Muslim world, including Iran.
The contest is organised by the Tehran-based Hamshahri, one of Iran's top five newspapers.
Farid Mortazavi, who is managing the contest, said on Sunday he has so far received a total of about 700 cartoons from some 200 artists.
Hamshahri launched the contest last month, saying it was a test of the Western world's readiness to print cartoons about the Nazi slaughter of six million Jews in World War II.
It called for cartoons under the title: "What is the Limit of Western Freedom of Expression?"