Influential former president Hojatoleslam Ali Akbar Hashemi Rafsanjani warned Iran's youth on Friday, June 13, not to fall into an American trap after a third night of protests in Tehran against Islamic rule. The protests have been applauded by Washington.

"I advise young people, especially students who are interested in the country... to express themselves, but be careful not to fall into the trap that the Americans have dug for them," Rafsanjani said during a Friday prayer sermon in Tehran.

A few hundred students and onlookers gathered in a Tehran University dormitory in the early hours of Friday chanting "freedom, freedom" and "death to Khamenei" in a reference to Iran's supreme leader, Ayatollah Ali Khamenei.

The protesters have also vented their anger at moderate President Mohammad Khatami, whom they accuse of failing to deliver his promised reforms after six years in government.

Washington, which accuses Iran of trying to build nuclear arms and sponsoring terrorism, has hailed the protests, which have drawn crowds of up to 3,000 people in the last three days.

"It's our hope that the voice of the Iranian people and their call for democracy and the rule of law will be heard and transform Iran into a force for stability in the region," state department spokesman Richard Boucher said on Thursday.

Analysts say the protests, while small, reflect widespread frustration among Iran's disproportionately youthful population and are likely to continue in the run-up to the July 9 anniversary of violent student protests in 1999.

But Rafsanjani, a mid-ranking cleric who heads the powerful Expediency Council -- a body which arbitrates on legislative disputes -- mocked the US support for the protesters.

"Some anti-revolutionaries, who are just wimps, chanted some slogans and now look how much America is pinning its hopes on them," he said in a sermon broadcast live on state radio.

Khamenei, who has the last word on all matters of state in Iran, accused Washington on Thursday of stirring up unrest in the country and warned that the authorities would show no mercy with the "hired mercenaries of the enemy".

Rafsanjani struck a more conciliatory tone, saying police had been ordered not to take "brutal action" against protesters.

"It's all right for some young people to be angry and they have to say some things and we shouldn't be very sensitive about that," he counselled.

Witnesses say police have largely played a pacifying role at the protests, using minimal force and working to prevent major clashes between the demonstrators and hardline Islamic militiamen armed with batons and chains.

US-based Iranian exile satellite television channels, which have played a key role in urging people to take to the streets in recent days, called for tens of thousands to turn out to protest after a big soccer match in Tehran later on Friday.

Rafsanjani said Iran's youthful population, around 70 per cent of which is under the age of 30, should beware of "these evil television stations in America".

He rejected American charges that Iran is pursuing a secret nuclear weapons programme. "The idea that Iran has nuclear weapons is a big lie... We are explicitly saying that we are opposed to weapons of mass destruction and believe the world should be disarmed," he said.