Iranian hardliners' attempts to resist the country's biggest uprising for decades appeared to be weakening today as popular pressure forced officials to announce a recount of disputed votes from Friday's presidential elections.

In a move that appeared to represent a further concession from the authorities, the country's powerful guardian council said it was ready to hold a recount in areas disputed by opposition candidates. No details of the scope of the recount and who would carry it out were available, though the council said it had rejected opposition demands to annul the official result, which saw the hardline incumbent, Mahmoud Ahmadinejad, declared winner by a landslide.

The council, which consists of 12 senior clerics, was reported to have said that a recount could lead to changes in the votes recorded for the candidates, but some analysts said it would not necessarily bring a change in the final result.

The decision by the guardian council follows the first known bloodshed of the crisis .At least seven people were killed yesterday after a rally in Tehran when tens of thousands of protesters jammed the streets in a show of defiance against the Iranian regime.

A rally scheduled for this afternoon by supporters of Mir Hossein Mousavi, who came second in the presidential poll according to the official results, was called off hours before it was due to start, but it remains likely that protesters will take to the streets.

Social networking sites used by Mousavi's supporters had talked of fears that the rally would be attacked by militias they claimed were loyal to Ahmadinejad.

A spokesman for Mousavi was quoted by the Reuters news agency as saying: "Mousavi … urged his supporters not to attend today's rally to protect their lives. The moderates' rally has been cancelled."

The same call for people to stay off the streets was made by Mousavi yesterday, but tens if not hundreds of thousands joined a seemingly spontaneous protest which had been banned by the regime. A pro-Ahmadinejad rally is also to be held this afternoon, raising further fears of clashes between supporters of the two men.

Iran was again rocked today by a series of fast-moving and complex developments, sometimes seemingly contradictory, as the world watched the efforts of the once all-powerful establishment in the Islamic republic to control events.

In key developments today:

• Two major figures from the reformist movement were arrested. Mohammad Ali Abtahi and Saeed Hajarian both supported Mousavi and were senior advisers to the former reformist president, Mohammad Khatami.

• Clashes and mass arrests were reported on university campuses of those supporting Mousavi.

• State television claimed that the "main agents" in post-election unrest had been arrested with explosives and guns. It gave no further details.

• President Ahmadinejad left Iran to attend a summit in Russia where he failed to mention the crisis gripping his country.

This morning, state radio said the deaths of seven people happened when shooting erupted after a group at the protest "tried to attack a military location" in western Tehran.

The first fatality came as shots were fired at supporters of Mousavi who had marched in their thousands through the city centre to Azadi (Freedom) Square, demanding that the election result be annulled.

Basij militiamen linked to Iran's powerful Revolutionary Guard were said to have been responsible for the shooting.

Precise figures for the scale of the demonstration were not available, but some estimates suggested that more than 500,000 people were involved in the protest against the election "theft".

"Mousavi, we support you! We will die but regain our votes," supporters, many wearing the green of the moderate's election campaign, shouted. Many carried signs that read: "Where is my vote?"

Several vehicles were set alight in Tehran's streets, and there were reports that protesters had taken to city rooftops at nightfall yesterday, shouting "death to the dictator".

The presence of huge crowds on the streets, and reports of other fatalities, appeared to dash earlier predictions that the unrest of the past three days would fade away.

There was a further twist yesterday when it was announced that Iran's supreme leader, Ayatollah Ali Khamenei, had ordered the guardian council to investigate claims of election fraud.

Diplomatic sources said this was not a major shift, suggesting Khamenei had merely warned Mousavi that he should proceed with his fraud complaints carefully, using only "legal" means available to him.

Khamenei endorsed the election result on Saturday, dashing opposition hopes that he might be persuaded to order a recount or even annul the outcome.

The interior ministry, which announced the election result on Saturday, and the president, have rejected charges of fraud.

Ahmadinejad compared protesters to football fans angry that their team had lost.

However, questions were asked about how 40m Iranian votes had been counted and the results announced so soon after the polls closed.

There was no sign of the anger diminishing. "Many of my friends are in prison," Saman Imani, a student who was beaten by police, said. "Iran is becoming a dictatorship. Ahmadinejad is denying the Holocaust because he's as brutal as Hitler was."

Ebrahim Yazdi, the leader of the banned opposition Freedom Movement and a veteran of the revolution, warned that Ahmadinejad's attacks on his opponents had opened a "Pandora's box" which had led to a deep crisis within the regime.

"The result of such a crisis now is that the rift among the ... personalities of the revolution is getting deeper," he said.

"It is also between people and their government ... a rift between state and the nation. It is the biggest crisis since the revolution."

Further reports told of people in Isfahan, Ahwaz, Zahedan, Yazd and Mashhad shouting "Allahu Akbar [God is great]" in support of the Tehran demonstrations.

Governments around the world were watching the situation closely. "The implications are not yet clear," David Miliband, the foreign secretary, said.

The US president, Barack Obama, said he was "deeply troubled" by the post-election violence. "It is up to Iranians to make decisions about who Iran's leaders will be," he said.

"We respect Iranian sovereignty and want to avoid the United States being the issue inside of Iran."