"This is the beginning of people expressing themselves toward a free Iran which I think is positive," said the US leader during a weekend visit to Kennebunkport, in Maine. "I think that freedom is a powerful incentive. I believe that some day freedom will prevail everywhere because freedom is a powerful drive."

Iran's foreign ministry accused the United States of "flagrant interference in Iran's internal affairs" and said the significance of the protests was being deliberately overstated by US officials.

"The Americans ignore the presence of millions of people to welcome the supreme leader and president, but they call the protests of a few individuals the voice of the people," said a ministry statement.

The violent street protests that have pitted students against hardline Islamists in Tehran for five nights in a row seemed to be abating yesterday after police turned against the Islamist vigilantes, arresting scores of them.

Riot police also formed a ring around Tehran University yesterday to protect students, and no new clashes were reported. The swoop on the bearded thugs who ride round on motorcycles, armed with clubs and chains, is a switch in tactics. In the past the gangs were able to act against peaceful protesters with impunity.

However, gunshots rang out in the early hours of this morning near a university dormitory. "Immediately after the gunshots some of these hardliners jumped on their motorbikes and headed in the direc tion of the [sound of the] shots," a Reuters correspondent said.

Iran's supreme leader, Ayatollah Ali Khamenei, foreshadowed the new policy on vigilantes on Thursday when he warned them not to take the law into their own hands. Student protests, which began in Tehran against plans to privatise some universities, have taken on an increasingly anti-regime tone, with calls for political prisoners to be freed.

Clashes have also been reported in other cities, including Shiraz, Ahvaz and Isfahan. US-based television stations backed by monarchists and other exiles have urged students to keep up the protests.

Iran's religious rulers apparently believe the vigilantes - usually their most militant allies - are only prolonging the unrest with their provocative attacks. In a climate of anxiety about US pressure after the war in Iraq, the reformist camp of secular MPs and press commentators have also been urging supporters to keep calm. Several articles have told the students not to go too far.

Last year, Mr Bush branded Iran part of an "axis of evil", with Iraq and North Korea, accusing them of pursuing weapons of mass destruction and supporting terrorism. US officials say they would welcome a change of government in Tehran, but stop short of demanding "regime change".

Mehdi Karroubi, Iran's speaker of parliament and a leading reformist, said the nation was united in its rejection of US pressure.