The rally, timed to take place around the 26th anniversary of Iran's Islamic revolution, was due to be held at Berlin's historic Brandenburg Gate at around midday (1100 GMT).

But city police said in a statement that discussions overnight led them to believe that the rally might have been planned for different reasons, without expanding on what they were.

A spokesman for the interior ministry said that the authorities believed the rally was aimed at recruiting more members for the People's Mujahedin, a group that is classified as a terrorist organisation by the European Union.

The organisers, who have lodged a legal appeal against the police action, said the ban was announced as some 40,000 Iranians from across Europe were converging on Berlin. The figures could not be independently verified.

An AFP photographer said that around 400 to 500 people, ostensibly pro-democracy supporters, had gathered peacefully on a square in western Berlin well away from the Brandenburg Gate and were being carefully watched by police.

More than a dozen buses stood nearby.

Some in the crowd held banners criticising the Islamic regime in Tehran.

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