Iranian officials and politicians have strongly condemned a Canadian newspaper report alleging that Iran had passed a law requiring Jews to wear yellow badges on their clothes.
The story also claimed Christians and Zoroastrians, the two other main religious minorities in mainly Muslim Iran, would have to wear badges identifying themselves.
"When I heard this, I immediately felt it was a mischievous act, a fresh means of pressure against the Iranian government," Maurice Motammed, the Jews' deputy in the Iranian parliament, told the FT on Sunday. "We representatives for religious minorities are active in the parliament, and there has never been any mention of such a thing."
The story, published in Canada's National Post on Friday, was also reported by the UPI news agency and widely posted on websites.
It led Chuck Schumer, a US senator to issue a news release calling the Iranian regime "lunatic" and "pernicious". At a White House press briefing, spokesman Sean McCormack said such a measure would be "despicable" and "carry clear echoes of Germany under Hitler".
Chris Wattie, the reporter, sourced his story only to Jewish groups and "Iranian exiles". He quoted Rabbi Marvin Hier, dean of the Simon Wiesenthal Center in Los Angeles, saying the move was "reminiscent of the holocaust" and that Iran was "moving closer and closer to the ideology of the Nazis".
The Post story was drawn from a column in the paper by Amir Taheri, editor of the state-owned Kayhan newspaper under the Shah of Iran before the 1979 Islamic Revolution. Mr Taheri claimed the law was "drafted two years ago" and had been revived "under pressure" from President Mahmoud Ahmadi-Nejad.
"The new codes would enable Muslims to easily recognise non-Muslims so that they can avoid shaking hands with them by mistake, and thus becoming najis (unclean)," Mr Taheri wrote.
A contributor to various newspapers including the New York Post, the Wall Street Journal and Al-Sharq Al-Awsat, a leading Arabic-language newspaper, Mr Taheri is an opponent of talks between the US and Iran.
He wrote in the New York Post last month the US should "go for regime change in Tehran" as the only way to stop Iran's drive to "dominate the region and use it as the nucleus of an Islamic superpower which would then seek global domination".
In Tehran, Hamid-Reza Asefi, the foreign ministry spokesmen, said "a Zionist operation" was "active in different countries, including Canada, to foment psychological war and spread lies" about Iran.
"It's being done now because of the nuclear issue to give a negative image of the Islamic Republic," he added.