Pro and Anti-Government Rallies Blanket Iranian Capitol

In the wake of violent protests that killed at least eight people so far in Iran, both supporters and opponents of Iranian President Mahmoud Ahmadinejad held separate rallies today in Tehran to either celebrate, or condemn, last week's contested elections.

Supporters of opposition leader Mir Hossein Mousavi gathered illegally to protest the election results. After initially encouraging his supporters to attend, Mousavi warned them away, fearing violence. Police said protestors would pay a heavy price.

"Our officers will crush any unrest," said Esmaeil Ahmadi Moqaddam, the national chief of police.

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VIDEO: Mir Hossein MousaviPlay

Demonstrators defied the threats. Some eyewitnesses reported crowds even bigger than Monday's massive demonstration, which drew hundreds of thousands.

"The protestors came to claim their rights," said one Tehran resident. "It's the government that should be held responsible."

Speaking on Iranian television, a member of the Guardian Council -- Iran's most powerful clerics -- offered a partial recount. But opposition leaders are demanding an entirely new election.

"I do not think the Guardian Council will have the courage to stand against the people," said Ali Akbar Mohtashamipou, a Mousavi representative.

There were no immediate reports of violence or arrests, although it is difficult to confirm exactly what happened after the government Monday banned foreign media from covering unauthorized gatherings.

Video of Barack Obama talking about Iranian elections.Play

Late Monday, Iranian state TV announced that Iran's supreme leader, Ayatollah ali Khamenei, met with envoys of four opposition candidates Tuesday and called for unity, The Associated Press reported.

Amateur video reportedly showed a long column of anti-government protesters walking, apparently peacefully along a wide street on Tehran's north side, not far from where the pro-government rally was being held.

In Washington, President Obama said today the Iranian government's decision to allow a recount of some of the votes in last week's election shows that Khamenei understands that the Iranian people have "deep concerns" about the election, and its bloody aftermath.

VIDEO: Tweeting a Revolution in TehranPlay

But Obama, speaking after a meeting with South Korea's president at the White House, continued to tone down his criticism of the government, saying it would be "not productive... to be seen as meddling."

Officials prepared to recount ballots, but from only from contested precincts, after a ruling by Iran's Guardian Council, controlled by Khamenei.

Ahmadinejad was declared the winner by "a large margin" in last Friday's election.

Mousavi posted a message on his Web site, saying he would not be attending any rallies today and urged his followers to do the same and "not fall in the trap of street riots" and "exercise self-restraint," The Associated Press reported.

VIDEO: Violence continues in Iran as the election protests escalate.Play

Violence escalated overnight following Monday's huge rally. Iranian state radio says seven people were killed in clashes when "thugs attacked a military outpost" after a mass rally.

But ABC News witnessed Monday's protest and it was very peaceful.

Unlike previous protests dominated by young people, Monday's protest mixed young and old, students and professionals.

A male protestor told us, "It's very clear, clear as daylight, you see the crowd. The government has really changed the results."

A female protestor chimed in, saying, "We're here for our revolution." Like many here, she expressed the hope that the demos can bring about a change in the government.

In the midst of these demos, there are some signs of the government ceding ground. In a completely unexpected development, Iran's Guardian Council announced a recount of the presidential vote, raising the possibility that the outcome may be overturned.

But state television quoted a council spokesman saying the recount would be limited to polling stations where candidates claim irregularities took place.

Iran's ruling Guardian Council calls the results provisional.

Protesters sent out another round of Twitter messages Tuesday, announcing plans to hold another rally. "Alert: Mousavi march still on 5PM," one message read, Reuters reported.

Mousavi and two other moderate candidates contesting the election results are scheduled to meet members of the Guardian Council today. They have been calling for the election results to be voided and a new election held.

Monday, Mousavi supporters flooded through downtown Tehran - numbering hundreds of thousands - making this possibly the largest demonstration here since the 1979 Islamic revolution.

The demonstration was officially illegal. The government denied protestors permission but many defied that decision to show support for Mousavi and anger at an election they see as stolen.

Mousavi, making his first public appearance since election day, told the crowd to "stand up to this charade."

All was peaceful until early in the evening pro-government paramilitary fired into the crowd.

The shots came from the roof, an eyewitness told ABC News over the phone, hitting a car with protestors riding on top. One man was hit and flung from the car.

The government blames the violence on the protestors, calling them vandals. But many Iranians don't accept that explanation, and the government now faces an enormous popular wave of dissent.

Violence is now spreading around the country. Mousavi's Web site reports that a protestor has been killed in Shiraz, while the BBC is reporting instances of live fire being used by police in provincial cities.

Fighting Bullets With Twitter & YouTube in Iran

Protestors are fighting bullets with technology. Wherever we go, we're surrounded by people, like us, filming on their cell-phones, and spreading the word on websites like Facebook and Twitter, which has led government censors to block them.

A Mousavi supporter scoffed at the government, saying "the government thinks that blocking websites can prevent the protests [...] but if people want, they can reach their goals anyway."

And the word still gets out, with amateur videos being posted on YouTube and shown to the world.

And there is another large opposition demonstration planned for today, with supporters of President Ahmadinejad planning their own demo at the same square, setting up the possibility of more clashes.

As unrest grows at home, Ahmadinejad is making his first overseas trip since the hotly contested election, visiting the Russian city of Yekaterinburg. He is attending the Shanghai Cooperation Organization (SCO) summit as an observer. The president told the summit that "the age of empires" had ended, but he made no mention of the protests, even as the international community raises questions about the validity of the election.

Obama's Remarks on Iran's Election

Monday, President Obama said he was "deeply troubled by the violence I have been seeing on television. I think that the, the democratic process, free speech, the ability for people to peacefully dissent, all those are universal values and need to be respected."

He said the U.S. "will continue to pursue a tough direct dialogue between our two countries and we'll see where it takes us. But even as we do so, it would be wrong for me to be silent about what we've seen on the television over the last few days and what I would say to those people who put so much hope and energy and optimism into the political process, I would say to them that the world is watching and inspired by their participation regardless of what the ultimate outcome of the election was."

But he added, the disputed election would not change his belief in greater diplomatic efforts with Iran.

"I have always felt that, as odious as I feel some of President Ahmadinejad's statements (are), as deep as the differences that exist between the United States and Iran on core issues, the use of tough hard headed diplomacy, diplomacy without illusions, is critical when it comes to pursuing a core set of national security interests," the president said. "We will continue to pursue a tough direct dialogue between our two countries."

ABC's Clarissa Ward contributed to the reporting of this story from Moscow and ABC's Jake Tapper contributed from Washington.