"This is misinformation by the government. They are testing the reaction of the people and they are going to make people afraid," Mohsen Makhmalbaf, Mousavi's unofficial spokesman told ABC News.
Hardline leaders have been calling this week for opposition leaders to be punished for fomenting unrest in Iran, which has been rocked by political turmoil since the June election.
Today the state prosecutor Gholam Hossein Mohseni Ejehei said the leaders may face charges of "supporting apostates," or those who go against God. His comments were published in the state-owned Iran newspaper.
The police posted on their Web site about 100 pictures of opposition protesters involved in Sunday's demonstrations, asking the public to help identify and report them on suspicion of "damaging public property and insulting sanctities."
Since Sunday's bloody clashes which left eight protesters dead, 500 people have been arrested, according to Iran's police Chief Gen. Ismail Ahmadi Moghaddam. This number could be higher because hardline Basij militiamen and intelligence agents may have apprehended more people on their own, Moghaddam told IRNA.
The pro-green web site Jaras says that as many as 1,510 people are being held and according to HRNA (Human Rights Activist News Agency) the notorious Evin prison is overflowing.
"According to reports from a human rights group in Iran, the massive number of arrests in the past three days forced Evin prison authorities to build a temporary detention center inside the prison." HRNA reported.
Photographs published on-line Tuesday purportedly showed people gathered outside the prison hoping for news of relatives inside.
Among those arrested in the last few days was the sister of Iranian Nobel Peace Prize winner Shirin Ebadi. Makhmalbaf views this is part of the new intimidation tactics being used by the regime. "They arrested the sister of Shirin Ebadi to put her under pressure. This is the style of the Mafia," he said.
"They always change their tactic and strategy. On Ashura they were killing people and targeting people," referring to the religious holiday earlier this week. "This is new, targeting. They are telling people we can kill you."
Makhmalbaf believes the government deliberately targeted Mousavi's nephew, a claim the police have denied.
They are not, however, shying away from threatening violence against the protesters. "The days of tolerance are over and the police will have a severe encounter with riot makers," Moghaddam warned Tuesday.
But such threats are not silencing members of the Green Movement as they continue to call for peaceful protests. "Go help your brothers!"one pro-green blogger encouraged.
Reuters contributed to this report