Thousands of Iranians have taken to the streets to protest against the election result [EPA]

Obama said the international community was "appalled and outraged" by what he said were the "threats, beatings, and imprisonments" of demonstrators.

"I have made it clear that the United States respects the sovereignty of the Islamic Republic of Iran, and is not interfering in Iran's affairs,'' he said during a news conference at the White House on Tuesday.

"But we must also bear witness to the courage and dignity of the Iranian people, and to a remarkable opening within Iranian society. And we deplore violence against innocent civilians anywhere that it takes place.''

Protesters in Iran have demanded the government re-run June 12 election that saw an overwhelming victory for Mahmoud Ahmadinejad, the incumbent president.

At least 19 people have been killed in post-election clashes across Iran between protesters and riot police and paramilitaries.

While the broad-based protests have focused on the legitimacy of the entire presidential election, most of the demonstrators are supporters of Mir Hossein Mousavi, Ahmadinejad's main challenger in the poll.

Obama said again that the world was watching events in Iran, and that how Tehran handles dissent from its own people "will help shape the tone not only for Iran's future but also its relationship to other countries".

The US president has been criticised by Republicans in the US who say he should do more to place pressure on Iran.

Diplomatic spat

Obama criticised Iran while maintaining that the US respects its sovereignty [Reuters]

Obama's remarks also come amid heightened international tensions over the crisis in Iran following the country's disputed poll.

The UK said on Tuesday it was expelling two Iranian diplomats after Tehran ordered two British diplomats to leave the country.

Tehran has also accused the US and Britain of seeking to interfere in Iran's internal affairs.

Though Ayatollah Ali Khamenei, Iran's supreme leader, has agreed to extend the deadline for filing election complaints by five days, the country's highest legislative body has refused to annul the poll results, a key demand of the Iranian opposition movement.

A spokesman for the Guardian Council said there would not be a fresh vote.

"If a major breach occurs in an election, the Guardian Council may annul the votes that come out of a particular affected ballot box, polling station, district or city," Abbas Ali Kadkhodaei was quoted as saying by Press TV, an Iranian government-funded station.

"Fortunately, in the recent presidential election we found no witness of major fraud or breach in the election. Therefore, there is no possibility of an annulment taking place," he said.

Mousavi along with Mehdi Karroubi and Mohsen Rezaei - the other two defeated presidential candidates - have rejected the veracity of the poll and demanded that fresh elections be held.

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