Iranian Supreme Leader Ayatollah Ali Khamenei accused US -backed Gulf Arab states of carrying out an attack on a military parade that killed 25 people, nearly half of them members of the country's elite Revolutionary Guards.
The death toll of 25 was expected to rise after gunmen attacked the parade in Khuzestan province on Saturday.
It was also reported that all four gunmen were killed.
Two of the gunmen were killed by security forces, while the other two were arrested, according to the local deputy governor, Ali Hosein Hoseinzadeh.
He added, "the USA and the occupying regime of Israel are those who train and finance terrorists; those regimes who are our Persian Gulf neighbors train terrorists, and the Islamic Republic of Iran itself is also the victim of terrorism today".
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The official also offered the Syrian government's "warmest condolences" to the Iranian leadership, government and people as well as families of the victims, wishing quick recovery to the wounded. "Iran holds regional terror sponsors and their U.S. masters accountable for such attacks".
"Iran will respond swiftly and decisively in defence of Iranian lives", he wrote on Twitter.
Speaking at a military rally in Tehran, he said Trump will fail in the "economic and psychological war" he's launched against Iran, just as Hussein failed in his 8-year war against the Islamic Republic.
The annual parade marks the start of the eight year war with Iraq in the 1980s.
"Three of the terrorists were killed on the spot and a fourth one who was injured died in hospital", Brigadier General Abolfazl Shekarchi, a senior spokesman for Iran's armed forces, told state television.
Suspicion immediately fell on the region's Arab separatists, who previously only attacked unguarded oil pipelines under the cover of darkness.
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Putin also said Moscow would beef up security for Russian military personnel in Syria as a priority response. The Russian plane was "not within the area of the operation " carried out by the Israeli jets, it said.
No group has yet claimed responsibility for the attack, but a spokesman for the Revolutionary Guards pointed the finger at ethnic Arab separatists.
Iranian soldiers and a Shiite Muslim cleric take cover during a gun attack on a military parade in the southwestern city of Ahvaz. Ahvaz is in the center of Khuzestan province, where there have been sporadic protests by the Arab minority in predominantly Shi'ite Iran. "There are several killed and injured", a correspondent told state television.
"We will never decrease our defensive capabilities. we will increase them day by day", Rouhani said at a military parade.
A statement on the Amaq news agency, which is used by IS as a mouthpiece, claimed the group was behind the attack, though this has not been verified.
Zarif did not specify which regional government he held responsible for the shooting, but Iran's elite Revolutionary Guards said the attackers were funded by Sunni arch rival Saudi Arabia.
Attacks on the military are rare in Iran.
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The Islamic State group also claimed responsibility in a message on its Amaaq news agency, but provided no evidence it carried out the assault and initially wrongly said the attack targeted President Hassan Rouhani, who was in Tehran.