The opposition in Iran had said they would not return to the streets during the morning prayers.
The Ayatollah’s address raises the stakes of any further protests in support of the reformist candidate Mirhossein Mousavi. Analysts believe they could trigger the heavy crackdown many have been predicting.
Although, up to eight people are reported to have been killed in the unrest, the security forces have so far not moved to prevent the rallies happening.
Scores of reformists have been arrested and authorities have imposed heavy restrictions on foreign and domestic media.
Mousavi risks provoking a backlash, but some observers say if he backs down now the reform movement will lose all its momentum.