TEHRAN: Thousands of Iranians staged a noisy anti-US rally in central Tehran Wednesday to mark the storming of the American embassy by students 30 years ago, as police and opposition supporters clashed violently nearby.

US President Barack Obama meanwhile said in a statement marking the anniversary of the event that sparked decades of hostility between America and Iran that the Islamic republic "must choose" now whether to open the door to opportunity and prosperity.

Huge crowds from early morning descended on the former US embassy complex in central Tehran, dubbed the "Den of Spies", chanting slogans such as "Death to America" and "Death to Israel," witnesses said.

They also smashed up posters they had brought with them of the American "Uncle Sam" symbol and chanted "The blood in our veins is a gift to our leader" -- a reference to Iranian supreme leader Ayatollah Ali Khamenei.

The crowd was constantly being swelled by people arriving on foot and by bus, witnesses said.

About a kilometre (mile) away at Haft-e-Tir square in the heart of the capital, riot police armed with batons and firing teargas moved in as several hundred opposition supporters attempted to stage an anti-government protest.

Witnesses said the protesters, who were chanting "Death to the dictator," refused to disperse and dozens were beaten or arrested.

Away from Haft-e-Tir square, opposition supporters -- numbering several thousand in all -- gathered in small groups on many street corners and side roads, witnesses said.

Staging brief demonstrations during which they chanted "Death to the dictator," and "Ya Hossein, Mir Hossein" -- in praise of main opposition leader Mir Hossein Moussavi -- the mainly-young protesters quickly moved on to new sites when police tried to disperse them.

Witnesses said the entire city centre had become a stage for "cat and mouse games" between police on bikes and youthful protesters.

Opposition supporters have since June been staging protests at every opportunity in Tehran against the re-election of Mahmoud Ahmadinejad in a presidential vote they claim was massively rigged.

Wednesday's anniversary, which has turned into a cornerstone of the Islamic regime, marks the capture by radical Islamist students of the US embassy compound on November 4, 1979 -- just months after the Islamic revolution toppled the US-backed shah.

The students, who took 52 American diplomats hostage and held them for 444 days, said they were responding to Washington's refusal to hand over the deposed shah, Mohammad Reza Pahlavi.

The two countries broke diplomatic ties after the event, which have yet to be restored.

Obama in his statement urged Iran to look to the future rather than the past.

"We have heard for 30 years what the Iranian government is against; the question, now, is what kind of future it is for," he said.

"It is time for the Iranian government to decide whether it wants to focus on the past, or whether it will make the choices that will open the door to greater opportunity, prosperity and justice for its people."

Leading Iranian dissident cleric Grand Ayatollah Hossein Ali Montazeri said meanwhile the capture of the US embassy had been a mistake.

".... considering the negative repercussions and the high sensitivity which was created among the American people and which still exists, it was not the right thing to do," Montazeri said in a statement posted on his website.

US-Iranian relations deteriorated even further during the tenure of former US president George W. Bush, who lumped Iran into an "axis of evil" along with North Korea and Saddam Hussein's Iraq.

During his first term as president, Ahmadinejad stepped up Tehran's anti-US tirade.

And although Washington has made diplomatic overtures towards Tehran under Bush successor Barack Obama, Khamenei said Iran still distrusts the United States.

"Every time they have a smile on their face, they are hiding a dagger behind their back," he said on Tuesday.

The anniversary comes at a time when Washington is backing a sensitive nuclear fuel deal for Tehran brokered by the UN atomic watchdog.