Thousands of people yelling "Death to America" and "Death to Israel" rallied in central Tehran on Friday to protest an anti-Islam film blamed for violent anti-US demonstrations in the Middle East and North Africa.

Thousands of people yelling "Death to America" and "Death to Israel" rallied in central Tehran on Friday to protest an anti-Islam film blamed for violent anti-US demonstrations in the Middle East and North Africa.

State television showed the crowd streaming out after Friday prayers at Tehran University in which a hardline cleric, Ayatollah Ahmad Janati, blamed the United States for the crude film, which ridicules Islam's Prophet Mohammed.

"It is a wonder how those running a country claiming to be a superpower become so stupid in taking such actions," he said.

"In their recent lunacy, they have made a movie -- whose finances are said to be paid by the Zionists -- to insult the prophet," he said.

The crowd responded by chanting "Death to America."

President Mahmoud Ahmadinejad was separately quoted by state media as claiming "lowbrow Zionists... seek to create a religious war between the followers of (different) faiths."

He added: "I believe that the actors behind the US (political) scene have realised that the Zionist regime (Israel) does not benefit them anymore... and the Zionists have realised this and seek to create waves to change the game."

On Thursday, hundreds of Iranians held a peaceful protest over the film near the Swiss embassy in Tehran, which handles US diplomatic interests. Security forces kept them well away from the compound.

Iran's supreme leader, Ayatollah Ali Khamenei, on Thursday demanded the United States punish those behind the film.

"If the American politicians are honest that they had no role, then they must punish those who committed this heinous crime and their financial backers in proportion to this great crime," Khamenei said, according to a statement on his official website.

The film at the centre of the outrage was made in the United States by a man initially reported by US media to be an American-Israeli who relied on funding from 100 Jews.

But subsequent reporting found that figure to be fictitious, likely invented by a Coptic Christian living in California.

US Secretary of State Hillary Clinton has condemned the film as "disgusting and reprehensible" and said "the United States government had absolutely nothing to do with this video."

Protests in the region have been taking place ever since Tuesday, when US diplomatic missions in Libya and Egypt were attacked by crowds whipped into a fury by the movie.

A US ambassador and three other US officials were killed in the Libya attack.