By Jay Deshmukh

TEHRAN - Iran warned the opposition on Tuesday that it will tolerate no further protests after the official poll watchdog upheld the re-election of President Mahmoud Ahmadinejad over complaints of fraud.

A defiant Ahmadinejad hit out at world powers over their response to unrest which has shaken the foundations of the Islamic regime, as Western governments condemned the continued detention of four British embassy staff in Tehran.

Mousavi's camp remained defiant, reiterating a demand for the cancellation of the June 12 vote which unleashed the worst crisis in Iran since the 1979 Islamic revolution.

"We believe that the damaged confidence of people will not be restored about the election with the opinion of a body the majority of whose members has earlier expressed their open support to one candidate," said the reformist Combatant Clerics' Assembly.

"We reserve the right to protest against the result of the election but believe that people should not pay any higher price and that escalating tensions and street protests are not the solution."

Another losing candidate, former parliament speaker Mehdi Karroubi, said on his website that given "the government's interference and the fake handling of complaints and the Guardians Council's recount, the election is invalid and I do not consider this government legitimate."

"I will pursue all people's demands in any way possible, and I will continue the fight anyway," he added.

For its part, pro-reform group the Islamic Revolution Mujahedeen Organisation said it considered the election had "no legitimacy" and that it would "use all legal means to peacefully combat the illegal government."

But opposition to Ahmadinejad's victory appeared to be waning as the massive street protests seen in the immediate aftermath of the election become sporadic gatherings easily dispersed by riot police and the Basij militia.

The head of the seminary in Qom - Iran's clerical nerve centre - called for a sustained crackdown on protests, saying demonstrators were "treading the path of the world's arrogance", a term Iranian leaders use to describe the United States.

"The regime must confront them," said Ayatollah Morteza Moghtadai.

Ahmadinejad himself said: "We must use all the capacities to break the monopoly of the global powers."

And the official electoral watchdog, the Guardians Council, warned defeated candidates that its decision on Monday evening to uphold official results giving the hardline incumbent a landslide first-round victory were no longer subject to challenge.

"They cannot object or protest in any other way," council spokesman Abbasali Kadkhodai told reporters.

"The Guardians Council is the final authority on the election and we announced our decision unanimously."

The watchdog had recounted 10 percent of the ballot boxes in what it described as a "thorough and comprehensive investigation" but the opposition boycotted the process.

The watchdog's deputy head, Ayatollah Mohammad Yazdi, told the Fars news agency: "If people like me remain in the Guardians Council and if Mousavi is a candidate in the next election, we will not approve him."

Another hardline cleric, Ayatollah Ahmad Khatami, even referred to Mousavi - premier in the 1980s and a close aide to the late revolutionary leader Ayatollah Ruhollah Khomeini - as being "anti-revolutionary and against the regime."

Opposition demonstrators took to the streets in vast numbers in the wake of the election in scenes of public anger not witnessed since the revolution, with unprecedented criticism of supreme leader Ayatollah Ali Khamenei.

But in the past few days, demonstrations have been only sporadic in the face of a swift and sometimes brutal response by the authorities to stop any unauthorised public gatherings.

At least 17 people have been killed and many more wounded in the clashes, according to state media, while many hundreds of protesters, political activists and journalists have been arrested.

Ahmadinejad's victory and the ensuing crackdown triggered a global outcry and saw relations between Tehran and the West deteriorate with Iran accusing Britain in particular of stoking the unrest.

Iran is still holding four locally recruited British embassy staff arrested for an alleged role in the post-election riots. Prime Minister Gordon Brown slammed the arrests as "unacceptable" and demanded their immediate release.

Italian Prime Minister Silvio Berlusconi warned of more penalties against Iran, which is already under three sets of UN sanctions over its refusal to halt sensitive nuclear work.

Berlusconi, who will chair the G8 summit from July 8 to 10, said: "According to the telephone conversations I have had with other leaders, I think we will go in the direction ... (of) sanctions."