But state media said only a firecracker had been set off by a young man excited to see the president and a police chief called news of an attack a "big lie" spread by foreign media.

The source from Ahmadinejad's office said the president's convoy was targeted as he was traveling from Hamadan airport to give a speech in a sports arena. The president was unhurt but others were injured and one person was arrested, he said.

"There was an attack this morning. Nothing happened to the president's car," the presidential office source told Reuters. "Investigations continue ... to find out who was behind it."

Ahmadinejad, who has cracked down on opposition since a disputed June 2009 presidential election, appeared live on Iranian television at the sports stadium. He looked unperturbed and made no mention of any assault.

The populist, hard-line Ahmadinejad has accumulated enemies in both conservative and reformist circles in the country as well as abroad.

But state news agency IRNA said "an excited young man from Hamadan exploded a firecracker in order to express his happiness. It did not cause any disturbance among the crowd which was giving a warm welcome to the president".

The media was to blame, it said.

"Some foreign media tried to take advantage of this event, in line with their goals," IRNA said. "Some domestic media called this harmless firecracker a grenade explosion and some called it a hand-made grenade and this led to some ambiguity."

Iran's deputy police chief Ahmadreza Radan said foreign news media wanted to exploit the situation by publishing false news. "It's a big lie that some foreign media published and wanted to spread," the semi-official Fars news agency quoted him as saying.

During a speech to a conference of expatriate Iranians in Tehran on Monday, Ahmadinejad said he believed he was the target of an assassination plot by Israel. "The stupid Zionists have hired mercenaries to assassinate me," he said.