Iran's conservatives mobilised large crowds Monday to celebrate the 1979 US embassy takeover, in a show of force against any thaw in decades of hostility towards Washington.

This year saw some of the largest November 4 rallies in years, less than two months after President Hassan Rouhani, a reputed moderate, held a taboo-breaking phone conversation with his American counterpart Barack Obama in New York.

Thousands of Iranians shouted "Death to America" in state-organised rallies across Iran after hardline and conservative factions in the establishment had called for a massive turnout to mark the 34th year since Islamist student stormed the embassy compound.

The ensuing crisis saw 52 American diplomats held hostage in the embassy compound for 444 days, and was a major turning-point for the 1979 Islamic revolution that toppled a US-backed monarch.

It also led to the severance of diplomatic ties with Washington and decades of mounting hostility, with the state officially adopting anti-American sentiment.

Rouhani's 15-minute phone call with Obama on the sidelines of the UN General Assembly, as well as an historic face-to-face meeting between the most senior Iranian and American diplomats, drew the ire of Iran's hardline factions, who view anti-Americanism as a core value of the Islamic revolution.

Supreme leader Ayatollah Ali Khamenei even voiced dismay, saying some of the actions by the president's team in New York were "not appropriate."

Khamenei on Sunday reiterated his suspicions, warning against trusting "an enemy who smiles," amid ongoing nuclear talks with a group of world powers, including the United States.

Rouhani for now enjoys Khamenei's support in his bid to use nuclear negotiations to lift international sanctions that have devastated the economy.

Israel and the West have long suspected Iran is pursuing nuclear weapons in the guise of a civilian programme, charges adamantly denied by Tehran, which insists its uranium enrichment is for entirely peaceful purposes.

The nuclear dispute is built on decades of mistrust stretching back to 1979, with the Islamic republic viewing the United States as an imperialist hegemon bent on destroying it, and Washington seeing Iran as a malevolent, expansionist regional power.

Calls for a high turnout went out on state television, and a large number of lawmakers from the conservative-dominated parliament vowed to attend the demonstrations Monday.

The main rally was held in front of the "Den of Spies" -- the old US embassy compound in central Tehran, which the Basij militia has transformed into a cultural centre with a museum showcasing American "crimes" against Iran.

Demonstrators, a considerable number of whom were students, waved anti-American banners, chanting "Death to America" and "Death to Israel."

Some set fire to US and Israeli flags in the presence of effigies of Obama, US Secretary of State John Kerry and Israeli Prime Minister Benjamin Netanyahu.

Similar gatherings were held in other cities across the Islamic republic, according to footage broadcast on state television.

Hardline ex-nuclear negotiator Saeed Jalili, sidelined since his unsuccessful bid for the presidency in July, defended the seizure of the embassy in his keynote speech.

"The Iranian nation cried that the US embassy is home to espionage and sedition 34 years ago," he said in remarks broadcast live on state television.

"Today, friends of America admit to this fact and even protest it," he said, referring to the row between Europe and Washington over alleged US spying, including on German Chancellor Angela Merkel's phone conversations.

A big poster hung near the embassy showed a glum Merkel holding her cellphone and bore the caption "Satan's betrayal."

Some protesters carried replicas of centrifuges, equipment used in enriching nuclear material, as a sign of "resistance against sanctions" amid ongoing negotiations with world powers over Iran's nuclear programme.

Jalili defended the "Death to America" chants as an outcry against an "oppressive" US government.

Basij chief Mohammad Reza Naqdi and vice president for executive affairs Mohammad Shariatmadari were reported to be among conservative figures and government officials attending the Tehran rally.