"Unfortunately, seven people were killed and several others wounded."
Also on Tuesday, the Iranian authorities arrested two prominent reformists, Saeed Hajjarian and Mohammad Ali Abtahi, their aides said.
The arrests came amid mounting unrest in the capital as Mousavi supporters pledged to continue their demonstrations.
Ahmadinejad supporters said they too planned a demonstration on Tuesday at the same location, raising the possibility of further clashes between the rival camps.
State television reported that Iran's highest legislative body, the Guardian Council, was willing to recount the votes and that the recount may lead to changes in cadidates' tallies.
Ahmadinejad in Russia
The news of the deaths came as Iran's president arrived in Russia for a security conference, despite the popular protests at home against a vote in which the authorities declared him the winner.
Ahmadinejad landed in Yakaterinburg for the Shanghai Co-Operation Organisation (SCO), in which Iran has observer status.
"We welcome the fact that elections took place, we welcome the new president on Russian soil and see it as symbolic that he made his first visit to Russia," Sergei Ryabkov, Russia's deputy foreign minister, told reporters after Ahmadinejad's arrival.
"This allows hope for progress in bilateral relations," he said.
Ahmadinejad's trip had been scheduled for Monday but he postponed it in the wake of the protests.
Initial reports suggested that armed men loyal to Iran's elite Revolutionary Guard opened fire during the protest rally in Azadi Square which was attended by tens of thousands of people.
| Police mingled among the protesters in an attempt to control those attending [EPA]
An Associated Press photographer in the square said one person had been shot dead and several others appeared to be seriously wounded.
The incident occurred in front of a local base of the Basij, Iran's volunteer paramilitary force, which had been set ablaze.
Many at the rally were supporters of Mir Hossein Mousavi, the election candidate defeated in Friday's poll.
Mousavi addressed the rally, his first public appearance since his defeat.
Clashes were reported hours after the demonstration, which was held in defiance of a ban imposed by the interior ministry, began.
Police fired tear gas as dozens of protesters set several motorbikes on fire.
"There has been sporadic shooting out there ... I can see people running," said a reporter of Iran's English-language Press TV who was at the demonstration.
The demonstration had been largely peaceful until the shooting.
Robert Fisk, a writer and journalist who was observing the rally, told Al Jazeera that he had heard shots being fired and saw demonstrators break into a run, but that things had continued to be largely peaceful.
"It's extraordinary to me that anyone would start shooting at such a huge crowd of people," he said.
"Especially people who have been continuously non-violent all the way from the start of this march, which has of course been prohibited so I suppose that will be the excuse."
Fisk said that not all the protesters were supporting Mousavi and that many were simply making a statement about the vote.
"I don't think they [the demonstrators] are all supporting Mir Hossein Mousavi, they are objecting to the presence of Ahmadinejad as the president. They don't believe he won those votes," he said.
The official results of the election gave Ahmadinejad 63 per cent of the vote and Mousavi 34 per cent, figures Mousavi has dismissed as a "dangerous charade".
Alireza Ronaghi, Al Jazeera's correspondent in Tehran, said several different police units were at the rally.
"There were several kinds of police there; riot police were easily distinguishable from the rest of them with their gear and vests and helmet," he said.
"There were normal police, with their green outfits. There were also plainclothes police who you could only recognise because they were carrying wireless communicators. And there were also others, who were just walking but looked like they didn't belong to the rally."
Ayatollah Ali Khamenei, Iran's supreme leader, on Monday ordered officials to look into the complaints against the veracity of the election.
The 12-man Guardian Council said it would rule within 10 days on the two official complaints it had received from Mousavi and Mohsen Rezaie, another losing candidate.
|Further protests by rival camps have been planned for Tuesday [AFP]
The council, headed by Ayatollah Ahmad Jannati, who endorsed Ahmadinejad before the vote, vets election candidates and must formally approve the results for the outcome to stand.
Earlier in the day, about 400 pro-reform students, many wearing green face masks to conceal their identity, gathered at a mosque in Tehran University and demanded Ahmadinejad's resignation.
Iran has faced a growing international backlash over the validity of the polls.
Barack Obama, the US president, said on Monday that he was deeply troubled by the post-election violence.
Saying the world was inspired by Iranian demonstrators, he added that free speech and the democratic process must be respected.
France and Germany summoned the respective Iranian ambassadors to account for events.