At least 20 people have been killed in a series of mass protests since Mousavi and Mehbi Karroubi, another reformist, complained that the re-election of Mahmoud Ahmadinejad, the president, in elections on June 12 had been rigged.
A student, who called himself Mohammed, told Al Jazeera that about 500 riot police and pro-government militia attacked the protesters on Sunday.
"It is no different if you are a woman or a man or children, they are just beating us ... they don't care if you are saying anything or just standing they just beat us," he said by phone from Tehran.
He said that a number of people had been badly injured and arrested in the violence.
The reports could not immediately be independently verified because of the restrictions imposed on journalists in Iran.
The latest demonstration took place as Britain has demanded that the Iranian authorities free all employees of its embassy in Tehran who have been accused of involvement in the unrest.
At least nine local staff working at the embassy have been detained since the disputed election, but it was unclear how many remained in custody on Sunday.
"The idea that the British embassy is somehow behind the demonstrations and protests that have been taking place in Tehran in recent weeks is wholly without foundation," David Miliband, the British foreign minister, said.
"This is harassment and intimidation of a kind which is quite unacceptable. We want to see [them] released unharmed."
The semi-official Fars news agency reported that the embassy employees "had a considerable role in recent unrest".
"This group played an active role in provoking recent unrest." it said.
Al Jazeera's Jonah Hull in London, quoting British embassy officials in Tehran, said the arrest of the embassy staff had taken place over the course of the last two weeks.
"This is a sort of running total - if you like - of a number of arrests and detentions of British embassy employees believed to be local Iranians rather than British citizens," he said.
"All of this comes off the back of two weeks of quite strident accusations against Britain with the supreme leader [Ayatollah Ali Khamenei] calling Britain 'the most evil of all western powers' in terms of its involvement and interference in Iranian affairs."
Iran has repeatedly accused Western powers - mainly Britain and the US - of inciting the street protests.
Tehran has also expelled two of Britain's diplomats, prompting London to demand that two Iranian diplomats leave.
Following the embassy row, the European Union agreed on Sunday that any future "harassment and intimidation" of its diplomats should be met with a "strong, collective response".
"Americans and the Zionists wanted to destabilise Iran ... even months before the election they started to talk about the possibility of vote rigging"
Gholamhossein Mohseni-Ejei, Iran's intelligence minister
"The EU calls on Iran and its authorities to stop hostilities against EU member states as well as [the] EU's partner countries and their citizens and to release an EU journalist still in custody," Jan Kohout, the Czech foreign minister, said.
Al Jazeera's Alireza Ronaghi in Tehran said "almost all Iranian officials among the conservative camp are criticising Western powers for interfering in Iran's affairs".
On Sunday, Gholamhossein Mohseni-Ejei, the intelligence minister, repeated the accusations that Western nations were using allegations of vote rigging to undermine the Islamic republic.
"I am announcing that no organised rigging which could affect the result of the election took place," he said.
"Americans and the Zionists wanted to destabilise Iran ... even months before the election they started to talk about the possibility of vote rigging in Iran and they continue this path after the election."