Tehran (AFP) - Iranian police have arrested merchants for selling clothing that featured the flags of the United States and Britain, two longtime foes of the Islamic republic, local media reported Tuesday.

Garments imprinted with "Satanic symbols" were also seized from stores in Tehran, city police chief General Hossein Sajedinia was quoted by the ISNA news agency as saying.

Sajedinia said reports about the activity had been received in the past two weeks, leading to surveillance and detentions.

"This morning we took these clothes off leading distributors," he said, noting that any stores that sell such items "will be closed."

The move underlined the fractious attitude from some authorities regarding the United States.

Washington broke off diplomatic relations with Tehran in 1980 after students seized its embassy and took dozens of hostages during the Islamic revolution the previous year.

However, a July 14 deal between Iran and six powers led by the US over Tehran's controversial nuclear programme was met by celebrations in the capital, particularly among youths keen to end Iran's isolation.

Despite the warmth toward the deal on the streets, Iran's senior leaders have said nothing will change in their approach toward the US.

The leader of the Islamic revolution, the late Ayatollah Ruhollah Khomeini, dubbed the United States the "Great Satan" on account of its policies and support for Shah Mohammad Reza Pahlavi, the last royal ruler before the Islamic republic was founded.

Britain also has a troubled history in Iran.

Along with the United States, it orchestrated a coup that toppled Iranian prime minister Mohammad Mossadegh in 1953 after he had nationalised the oil industry.

But in a major signal of a thaw in relations after the nuclear deal, Britain and Iran reopened their respective embassies in Tehran and London last month, after a four-year closure.

British Foreign Secretary Philip Hammond, who visited Tehran to lead the ceremony, said he hoped it could spark a "new chapter" in ties between the two countries.