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A Sunni opposition group known as Jundullah (God's Soldiers), which Iran links to al-Qaida and the US, claimed responsibility for the mosque bomb.

The Saudi-owned al-Arabiya television said a man claiming to represent Jundullah called it saying the bombing was a suicide attack aimed at Basiji forces, a religious militia, that were meeting in the mosque to co-ordinate election strategy.

Iran's leaders have repeatedly blamed US and Israeli "spy agencies" for arming and assisting insurgent groups, including dissident Kurds living in western Iran. They say the aim is to destabilise Iran and promote regime change.

Ayatollah Ali Khamenei, Iran's supreme leader and a strong, public backer of President Mahmoud Ahmadinejad's bid to win a second term, added his weight to the claims. "No one can doubt that the hands of … some interfering powers and their spying services are bloodied by the blood of the innocent," he said.

Major General Hassan Firouzabadi, Iran's armed forces chief of staff, also blamed outside forces, pointing the finger at Britain in particular. "The attempts made by colonialism, Zionism and on top of them England for sowing discord between Shias and Sunnis have yielded no result," he said.

Any direct or indirect US involvement in fomenting pre-election tensions is considered unlikely, given Obama's new policy of engagement with Iran. Israel, which believes Iran poses an existential threat, takes a harder line.

Unconfirmed reports published in the US last year said the Bush administration obtained $400m in "off-the-books" congressional funding to finance covert operations aimed at assisting minority Ahwazi Arab and Baluchi groups and other dissident organisations inside Iran. It is unclear whether these alleged operations have continued since Obama took office.

He was firmly part of the political inner circle after the 1979 Islamic Revolution, serving as editor of Jomhuri Eslami, which was the state newspaper at the time. He then was prime minister from 1981-89 — spanning nearly the entire eight-year war with Iraq that left an estimated 1 million dead and plunged Iran into a crippling economic crisis. There were early hints, however, that he chafed against the system even as he was hailed as a revolutionary patriot.

Since leaving office, he has generally stayed in the background in advisory roles and as a member of the Expediency Council, which mediates between the parliament and the non-elected Guardian Council, which is directly influenced by the supreme leader.

"To hard-liners, Mousavi is a more acceptable version of Khatami. And to reformists, Mousavi is a moderate who won't seek profound changes," said Hasan Vazini, a political commentator at the conservative Tehran-e-Emrooz newspaper. But others believe that this type of middle ground approach will do little to shake Iran's establishment. "(Mousavi) is Ahmadinejad without the invective or anger," said Patrick Clawson, deputy director of the Washington Institute for Near East Policy. "He does not appear to be a bold reformer."

Political analyst Vazini said that "with Khatami out of the race, conservatives are not so likely anymore to support Ahmadinejad as their sole candidate." The Islamic Iran Participation Front, the country's largest reformist party, quickly threw its support behind Mousavi, a trained architect who is known as an accomplished amateur painter.

In the first official ­confirmation, state radio also reported that seven people had been killed at the end of Monday when state militia appeared to open fire on demonstrators bent on breaking into a building.It was feared this rally of Ahmadinejad supporters would result in further deadly clashes between ordinary ­Iranians. But violence was avoided, to begin with at least, after the Mousavi campaign rescheduled its mass meeting to a northern district of Tehran and an hour later.

Obama has already expressed a readiness to have face-to-face diplomatic contacts with Tehran, a major shift from former President George W. Bush's policy of trying to isolate a country he once branded part of an "axis of evil".

Mohammad Hassan Khani, assistant professor of international relations at Tehran's Imam Sadiq University, described Obama's appeal as a positive gesture but noted it came only a week after the extension of US economic sanctions. "This is somehow conflicting and making people here confused," he said. President Mahmoud Ahmadinejad has demanded Washington say sorry for decades of "crimes" against the Islamic Republic. Tehran also says it cannot let down its guard as long as US troops are posted on its borders in Iraq and Afghanistan. Analysts have said that Iran is setting tough conditions for dialogue with the United States to buy time for its ponderous and opaque decision-making process, which is facing a dilemma on whether or not to open up.

European Union foreign policy chief Javier Solana said he hoped Iran would pay close attention to Obama's appeal. "I hope that that will open a new chapter in relations with Iran," he told reporters before going into an EU summit. To stress the seriousness of Obama's overture, the White House distributed the videotape with Farsi subtitles and posted it on its website to coincide with Iranian observance of the ancient festival of Nowruz, celebrating the arrival of spring. But his appeal was not shown nor mentioned on Iran's main 2pm state television news, although it was reported by Iranian news agencies including the official agency IRNA.

The operation would have an initial highly aggressive stage lasting 36 hours, AFP news agency reported. It aims to improve security ahead of presidential elections on 20 August 20, allowing voter registration where before there was none, Gen Nicholson said.

As of June 2009, Nato's International Security Assistance Force had 61,130 personnel from 42 countries including the US, European countries, Australia, Jordan and New Zealand. The US is the largest contributor, providing 28,850 soldiers.

It also has troops under Operation Enduring Freedom - mostly in the east of Afghanistan on the border with Pakistan - that are not under Isaf's command. In December 2008 they numbered 17,100. President Obama has pledged to send an additional 21,000 extra soldiers to Afghanistan, many of them redeployed from operations in Iraq, to help with training Afghan security forces and to tackle the insurgency.

"The Iranian nation has repeatedly announced that it does not want nuclear weapons ... keeping nuclear arms would create a big danger and trouble and even if they pay us we do not want it," he said. Khamenei said the United States had occupied two Muslim countries, Iraq and Afghanistan, under the pretext of fighting terrorism. "The terrorists kill one, two or ten people ... but you kill 100 or 150 people," he said, referring to a rising civilian death toll as foreign and Afghan troops battle Taliban insurgents.

Mr Ahmadinejad is due to hold a news conference on Sunday before attending what is expected to be a huge victory rally. In a TV address on Saturday, he condemned the outside world for "psychological warfare" against Iranians during the election, which he called "totally free and fair". "This is a great victory at a time and condition when the whole material, political and propaganda facilities outside of Iran and sometimes... inside Iran, were totally mobilised against our people," he said.

The streets of the Iranian capital were reported to be calm on Sunday morning, but concrete barriers are being erected in the city centre.

Senior Iranian political figures have offered their backing to Mr Ahmadinejad, among them parliamentary Speaker Ali Larijani and the head of the judiciary.

The president already has the backing of the country's Supreme Leader, Ayatollah Ali Khamenei, who endorsed his election win on Saturday.

World reaction has been muted, with major powers slow to welcome the Iranian result. The European Union and Canada have voiced concern about allegations of irregularities, while US Secretary of State Hillary Clinton said only that Washington hoped the result reflected the "genuine will and desire" of Iranians. Long-time allies such as Venezuela and Syria, as well as neighbours Iraq and Afghanistan, are among those who have recognised Mr Ahmadinejad as the winner.

Mr Obama has said he wants to broker a peace deal with Syria and Israel to end decades of regional conflict. Improved relations with the US could mean a lifting of sanctions and many new business deals - something many ordinary Syrians are hoping for.

Damascus, where the United States still does not have an ambassador, remains a key regional player, says the BBC's diplomatic correspondent Jonathan Marcus. It has an influence over events in Lebanon; it shares a crucial border with Iraq; it has a significant relationship with the Islamist Palestinian movement Hamas which controls the Gaza Strip; and it is a close ally of Iran, he says. But above all it wants Syria to push Hamas along the road to Palestinian unity - and ultimately Washington would like to woo Damascus away from Tehran.

They want to focus on tougher regulation of the financial community. They want the summit to start re-writing the global rulebook on capitalism.

The intriguing thing is that the economic crisis and Brown's lining up with Obama, who has proclaimed his belief in the enduring "special relationship" with Britain, has revived the Franco-German alliance which used to dominate EU affairs and which had seemed to wither under Merkel and Sarkozy. She doesn't like his touchy-feely ways, he finds her incremental style of politics frustrating. They had drifted apart, but they are back sharing a political tent.

The big question on the fiscal stimulus front is: What will China do?

Brown's hope is that China, worried about the safety of its money invested in the U.S., will be ready to commit extra funds to fighting the world recession. But if he agrees to do so, President Hu Jintao will surely exact a price.

If China comes up with the money to help, it will need assurances that it will in the future enjoy greater power within such multilateral institutions as the IMF and the World Bank. The U.S. and Europe, who have dominated the G-8, now have little option too but to accept a new world order.

Whatever the outcome in London it is unlikely now that the G-8 alone will ever carry the same sway. And not surprisingly, Italian Prime Minister Silvio Berlusconi, who hosts this summer's G-8 in Sardinia, has proposed that its gathering should be immediately followed by one of the G-20.