Iranian riot police swarmed a major bazaar Wednesday in Tehran as demonstrators launched protests against firebrand President Mahmoud Ahmadinejad, blaming him for plummeting currency that's leaving families across the country struggling.
A day after Ahmadinejad acknowledged that his country is taking a hit, and placed the blame largely on "the enemy's" sanctions, crowds of protesters also took to the streets in another commercial area in the capital, shopkeepers said.
They chanted slogans slamming Ahmadinejad's regime and complained about the high prices of goods and food. Riot police dispersed the crowd, a shopkeeper said.
The semi-official Mehr news agency reported two European tourists and some "agitators" were arrested by security forces. The Europeans violated Iranian law by gathering information about the protests, it said.
The country's supreme leader, Ayatollah Ali Khamenei, echoed Ahmadinejad's position Wednesday, saying that growing pressures are mainly aimed at making his country surrender, "but the Iranian nation has and will never surrender to pressures and this has made the enemy furious," the semi-official FARS news agency reported.
The United States and European Union have imposed numerous sanctions aimed at pressuring Tehran into sitting down for international negotiations on its nuclear program.
U.S. State Department spokeswoman Victoria Nuland said the growing protests show that "clearly the Iranian people are demanding better from their government and speaking out against the gross mismanagement of the economy and the situation in the country."
The United States is "watching the situation very closely," she said.
The "sanctions that the international community has put on the government as a result of its lack of forthcomingness on its nuclear program are being felt on the ground," she said.
Ahmadinejad, in a speech Tuesday, insisted the sanctions hurt the people, not the government. He said the country's economy "has become a tool for psychological warfare."
The rial's value was cut in half from September of last year through last month, the Congressional Research Service said in a report. It has fallen even further since, including a sharp nosedive this week, reaching historic lows against the value of the dollar.
At the main bazaar in central Tehran, some protesters used boxes and tires to start fires, according to a merchant who spoke on condition of anonymity for security reasons.
But Mehr quoted the head of the bazaar's merchant's association as saying that officials had observed "suspicious" activity and identified people around the market who were from "outside the bazaar community."
The bazaar was closed for safety reasons, Mehr reported.
Dozens of police on motorcycles responded to the scene, and dozens more were on foot.
As the police were surrounding the bazaar, the semi-official Iranian Labor News Agency carried a quote from police official Col. Khalil Helali saying that based on his information, "a limited number of people headed towards the bazaar and had chanted slogans."
Helali later told Mehr that he had no indication the bazaar was closed. Helali is chief of Tehran's Business Locations Police, which oversees workplaces.
Police also gathered in two major squares -- Ferdosi and Vali Asr -- although no demonstrations were immediately reported in those spots.
In a speech Wednesday, Ahmadinejad also said part of the problem plaguing the country's currency is "internal."
He blamed "22 ringleaders" who the country's intelligence services have determined are causing tensions and manipulating currency.
The president gave no details. But people who trade currency illegally have been increasingly concerned about a crackdown by Iranian forces.
Months ago, an Iranian man told CNN that with the country's economic downfall, the only way for his sons to live a decent life was to fall in with influential people or make shady business deals -- such as trading foreign currency on the black market.
But Ahmadinejad focused the majority of his remarks on the United States and the West.
"There is a hidden war, a very pervasive and heavy warfare that is happening across the world directed towards Iran," he said.
The "enemy" has "succeeded in reducing the sale of our oil to an extent, but God willing, we will fill it up," he insisted.