TEHRAN - A top cleric on Friday urged Iranians to confront the “economic war” posed by Western sanctions and for authorities to cease internal bickering, days after protests erupted in Tehran over a collapse in Iran’s currency.

“The pressure today imposed on us by the world arrogance (the United States) is full-fledged economic war,” Ayatollah Ahmad Khatami said at the weekly Friday prayers in Tehran broadcast by state media.

“This pressure will not last. Our people have been tested and they will not be worn down. Our people will ensure they (the enemies) are the ones worn down,” said the cleric, a ranking member of the Assembly of Experts that supervises the activities of Iran’s supreme leader Ayatollah Ali Khamenei.

On Wednesday, police and stone-throwing protesters scuffled in central Tehran after security forces closed down money exchange bureaux and arrested 16 people accused of being “disruptors” in the market.

Shopowners in the Grand Bazaar - a commercial maze in the heart of Tehran that has historically held political influence - closed for security reasons and because they said the currency crash made business unviable.

It was the first sign of public unrest after Iran’s currency, the rial, abruptly lost 40 percent of its value this week, resulting in sharply higher prices for imported goods and food as well as uncertainty for businesses.

Although calm returned on Thursday, a shopkeepers guild said the bazaar would not fully open until Saturday.

Blame for the sudden slide in Iran’s currency, the rial, has been put on both the Western sanctions and on economic mismanagement by President Mahmoud Ahmadinejad’s government.

The sanctions are designed to pressure Iran to curb its nuclear programme, which the West suspects is used to develop nuclear weapons capability. Iran denies that and says its atomic activities are purely peaceful.

Several officials have pointed the finger at Ahmadinejad, who on Tuesday gave a media conference in which he said he was ready to resign if other Iranian authorities found his presence “intolerable.”

In his prayer speech, Khatami said that while “some of the pressure we see emanates from sanctions... mismanagement should not go unnoticed.”

He appealed for Iran’s government, judiciary and parliament to unite, saying: “The only path to solve these problems is cooperation between officials and the people.”