The deputy head of Iran's Revolutionary Guards warned U.S. and Israeli leaders on Monday to expect a "devastating" response from Iran, accusing them of involvement in Saturday's attack on a military parade in the city of Ahvaz that killed 25 people.
"You have seen our revenge before ... You will see that our response will be crushing and devastating and you will regret what you have done," Hossein Salami said in a speech before the funeral of the victims in Ahvaz, broadcast live on the state television.
Iran's supreme leader, Ayatollah Ali Khamenei, meanwhile said that the attackers who killed 25 people at a military parade were paid by Saudi Arabia and the United Arab Emirates, and Iran would "severely punish" those behind the attack.
"Based on reports, this cowardly act was done by people who the Americans come to help when they are trapped in Syria and Iraq, and are paid by Saudi Arabia and the UAE," Khamenei was quoted as saying on his official website.
Thousands of people packed the streets of the southwestern Iranian city of Ahvaz to mourn the victims of Saturday's assault that killed 25 people, including 12 members of the elite Revolutionary Guards.
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Many chanted "death to Israel and America".
The coffins, wrapped in the flag of the Islamic Republic, were carried by the mourners. Many held pictures of a four year old boy killed in the attack.
The assault, one of the worst against the most powerful military force of the Islamic Republic, struck a blow at its security establishment at a time when the United States and its Gulf allies are working to isolate Tehran.
Also Monday, Iran's intelligence minister said that a "large" network of suspects have been arrested in connection with Saturday's attack.
"We will identify all terrorists linked to this attack ... A large part of this network has already been arrested," Mahmoud Alavi was quoted as saying by the judiciary's news agency Mizan, on the sideline of the funeral of the victims in Ahvaz.
Gunmen disguised as soldiers attacked an annual military parade in Ahvaz on Saturday, killing 25 and wounding dozens of people. 12 of those killed are reported to be members of Iran's Revolutionary Guards Corps, the semi-official Tasnim news agency said.
An Iranian ethnic Arab opposition movement called the Ahvaz National Resistance claimed responsibility for the attack. All four attackers were killed. Islamic State militants also claimed responsibility. Neither claim provided evidence.
A spokesman for the Iranian military said the attackers were trained by two Gulf states, and are connected to Israel and the U.S.
"These terrorists... were trained and organised by two ... Gulf countries," Brigadier General Abolfazl Shekarchi told the official news agency IRNA.
"They are not from Daesh (Islamic State) or other groups fighting (Iran's) Islamic system ... but they are linked to America and (Israel's intelligence agency) Mossad."
Top Iranian leaders also blamed the United State's Gulf Arab allies for the bloodshed that struck a blow at the heart of its security establishment.
The accusation will almost certainly antagonise Iran's regional foe Saudi Arabia. The oil superpowers are waging a war for influence across the Middle East, backing opposite sides in Syria, Yemen, Iraq and Lebanon.
The United Arab Emirates, a close ally of Saudi Arabia and Washington, rejected Iranian allegations alluding to its involvement in the violence.
Speaking at the funeral ceremony, Defence Minister Amir Hatami warned the "terrorists" to expect the revenge of the Iranian nation.