Thousands of mourners have chanted "Death to Israel" and "Death to America" as an Iranian nuclear expert killed in a bomb blast was buried.
Iran accuses the two nations of killing the expert as part of a secret operation to stop its nuclear programme.
The assassination of Mostafa Ahmadi Roshan has raised calls in Iran for retaliation against the US and Israel, and an independent news website said Iran is preparing a covert counter-offensive against the West.
Roshan, a director of the Natanz uranium enrichment facility in central Iran, was killed in a daylight assassination when two attackers on a motorcycle attached a magnetic bomb to his car in Tehran. The killing bore a strong resemblance to earlier killings of scientists working on the Iranian nuclear programme.
State TV showed thousands of people carrying Roshan's coffin through central Tehran before it was taken to a north cemetery for burial. As it marched, the crowd chanted "death to terrorists".
Iran's Supreme Leader Ayatollah Ali Khamenei, who has the final say on all state matters, called Roshan's killing a "cowardly assassination" and accused the US and Israel of being behind the attack.
He vowed on Thursday that the perpetrators and those who ordered the attack would be punished.
US Secretary of State Hillary Rodham Clinton has denied any American role in the attack.
Israeli officials, in contrast, have hinted at covert campaigns against Iran without directly admitting involvement.
The independent news website, irannuc.ir, quoted an unidentified security official as saying Iran is preparing a covert counter-offensive against the West in retaliation. It suggested the retaliation could include assassinations abroad.