University students in Iran have joined shopkeepers and bazaar merchants in protests over the country's soaring cost of living.

Footage showed scores of people marching along a street in the capital Tehran, chanting "rest in peace Reza Shah", a reference to the founder of the royal dynasty ousted in the 1979 Islamic revolution.

The semi-official Fars News Agency said hundreds of students held protests at four universities in Tehran on Tuesday.

Video from Monday showed people gathering in central Tehran and chanting slogans.

Image: Protesters march in Tehran. Pic: Fars News Agency/AP

Iran's currency, the rial, has lost nearly half its value against the US dollar in 2025, with inflation reaching 42.5% in December and the price of food rising as much as 72% as the country bears US sanctions and threats of Israeli strikes.

Iran's President Masoud Pezeshkian said he had asked the interior minister to listen to the "legitimate demands" of the protesters.

A spokesperson for the government said a dialogue mechanism would be set up and would include talks with protest leaders.

"We officially recognise the protests," they said on Tuesday. "We hear ​their voices and we know that this originates from natural pressure arising from the pressure on people's livelihoods."

The demonstrations are the first major protests since Israeli and US strikes on Iran in June, which prompted outpourings of patriotic solidarity.

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Image: Pic: Fars News Agency/AP

Iran's economy has been suffering for years after Donald Trump reimposed US sanctions during his first term as president in 2018 and ended an international deal over the country's nuclear programme. United Nations sanctions on the country were also reimposed in September.

Inflation is currently pushing many prices beyond the means of most people.

Iran faced protests across the country in 2022 over price hikes, including for bread.

The country's clerical rulers were rocked by the boldest unrest yet in years over the same period and into 2023 after the death of a young Iranian Kurdish woman, Mahsa Amini, in the custody of the morality police, who enforce strict dress codes.

The country is still under intense international pressure, with Mr Trump on Monday saying he might back another round of Israeli airstrikes if Tehran resumes work on ballistic missiles or a nuclear weapons programme.

The US and Israel conducted airstrikes on Iran's military and nuclear installations over 12 days in June, aimed at stopping what they said were efforts to develop the means to build an atomic weapon.

Iran has said its nuclear energy programme is entirely peaceful and claimed it has not tried to build a nuclear bomb.