Baghdad announced a three-day mourning period for Khamenei, who had been Iran's hardline spiritual guide and top political authority since 1989.

"With deep sorrow, I extend my condolences to the noble Iranian people and all Muslims on the martyrdom" of Khamenei, whose "unique role in leading the Islamic Republic of Iran for many years is evident to all", said Grand Ayatollah Ali Sistani, himself born in Iran.

"Through his martyrdom and the large-scale military assault on Iran, the enemies sought to inflict immense damage on this beloved country.

"The great Iranian people are expected to maintain their unity, to stand firm and thwart the aggressors' sinister goals," Sistani added in a statement.

Khamenei's death was met with anger in Baghdad, where hundreds of protesters have tried since the early hours of Sunday to storm the fortified Green Zone where the US embassy is located.

Iran wields significant influence in Iraqi politics, and also backs armed groups whose power has grown both politically and financially.

Iraq has for decades been a proxy battleground between the US and Iran.

Government spokesman Bassem al-Awadi said in a statement that "with deep sorrow, we extend our condolences to the noble people of Iran and the entire Muslim world" after "a blatant act of aggression" that killed Khamenei.

He said the government had announced three days of mourning, while urging an immediate cessation of military operations that "are driving the region to unprecedented levels of violence".

The Coordination Framework, a ruling coalition of Shiite groups with varying degrees of links to Iran, said "with deep sorrow and profound grief, we mourn the passing of the martyred leader, Ayatollah Ali Khamenei".

His "blood will remain a guiding light for all generations" and "the curse will continue to haunt the murderous Zionists for all time", the coalition added.

Influential cleric Muqtada Sadr meanwhile said in a statement that "we extend our condolences to the Islamic world", and also declared a three-day period of mourning.