Iran's Supreme Leader Ayatollah Ali Khamenei has said he supports a fuel price rise that has sparked protests across the country.
The Ayatollah blamed "hooligans" and counter-revolutionaries for violence that has been witnessed in several cities.
At least one person is confirmed dead in clashes with police but reports suggest the number could be higher.
Officials have warned of a tougher response if "illegal" actions continue.
Protests erupted on Friday after the government unexpectedly announced it was rationing petrol and removing subsidies - sending prices up by 50%.
The measures are the latest sign of pressure on the Iranian economy after the re-imposition of US sanctions. The government says the changes will free up money to help the poor.
What's the official reaction?
In a statement on Sunday, Ayatollah Khamenei acknowledged that some people were "no doubt worried" by the decision to increase fuel prices.
"But sabotage and arson is done by hooligans not our people," he said, quoted by state TV.
"The counter-revolution and Iran's enemies have always supported sabotage and breaches of security and continue to do so."
Following his comments a group of MPs withdrew a motion aimed at reversing the fuel-price increase, Iranian media reported.
Iran's state-run TV has accused "hostile media" of trying to exaggerate the scale of the unrest. Footage of protests has been widely distributed on social media.
What's the situation on the ground?
Internet monitoring service Netblocks said late on Saturday that Iran was experiencing a near-total national internet shutdown.
Confirmed: #Iran is now in the midst of a near-total national internet shutdown; realtime network data show connectivity at 7% of ordinary levels after twelve hours of progressive network disconnections as public protests continue #IranProtests 📉— NetBlocks.org (@netblocks) November 16, 2019
📰 https://t.co/1Al0DT8an1 pic.twitter.com/u6bVsfvOOm
The move was condemned by US State Department spokeswoman Morgan Ortagus who tweeted: "We condemn the attempted shutdown of the internet. Let them speak!"
Prosecutors quoted by the semi-official Isna news agency on Sunday said 40 people were arrested in the central city of Yazd, most of whom were not local residents.
Some shops in Tehran's bazaar were shut on Sunday following "disruption" caused by people outside, Isna added without elaborating.
Some of the worst unrest has been reported in the central city of Sirjan where at least one person was killed during protests on Friday.
Demonstrations were reported on Saturday in the cities of Doroud, Garmsar, Gorgan, Ilam, Karaj, Khoramabad, Mehdishahr, Qazvin, Qom, Sanandaj, Shahroud and Shiraz, state media reported.
Video purportedly from the demonstrations showed cars set on fire and roads deliberately blocked by abandoned vehicles. Crowds were heard chanting for the police to support them and for others to join the protests.
What's the background?
Under the new fuel measures, each motorist is allowed to buy 60 litres (13 gallons) of petrol a month at 15,000 rials ($0.13; £0.10) a litre. Each additional litre then costs 30,000 rials.
Previously, drivers were allowed up to 250 litres at 10,000 rials per litre, AP reports.
Revenue gained from removing subsidies on petrol will be used for cash payments to low-income households, the government says.
US sanctions were re-imposed last year after President Donald Trump abandoned the landmark nuclear deal between Iran and six world powers.
The sanctions have led to a sharp downturn in Iran's economy, pushing the value of its currency to record lows, quadrupling its annual inflation rate, driving away foreign investors and triggering protests.