The deputy head of Iran's Revolutionary Guards has warned the US and Israel to expect a "devastating" response after accusing them of involvement in an attack on a military parade in the city of Ahvaz.
Hossain Salami spoke as thousands of people attended the funerals of soldiers killed in the attack.
At least 25 people died including 12 members of the Revolutionary Guards.
The assault struck a blow at Iran's security establishment at a time when the United States and its Gulf allies are working to isolate Tehran.
The judiciary's news agency Mizan reported that Iran's intelligence minister is claiming that a large network of suspects has already been arrested in connection with the attack.
Iran has declared today a national day of mourning. Public offices, banks, schools and universities will be closed in Khuzestan province.
Four assailants fired on a viewing stand in Ahvaz where Iranian officials had gathered to watch an annual event marking the start of the Islamic Republic's 1980-88 war with Iraq.
Islamic State's Amaq agency posted a video of three men in a vehicle who it claimed were on their way to carry out the attack.
Ahvaz National Resistance, an Iranian ethnic Arab opposition movement which seeks a separate state in oil-rich Khuzestan province, also claimed responsibility.
Senior commanders of the Islamic Revolutionary Guards have said the Ahvaz attack was carried out by militants trained by Gulf states and Israel, as well as supported by America.