After 40 days of US-Israeli bombing, Iran has been largely peaceful since a ceasefire kicked into place on April 8.

But weeks of negotiations have failed to bring about a long-term peace deal while tensions remain high with occasional exchanges of fire, like that this week in the Strait of Hormuz, Kuwait and Bahrain.

The streets of Tehran, festooned with brightly coloured balloons and flags of the Islamic republic and full of revellers stretching kilometres into the distance, offered a stark contrast to the tense diplomatic sphere.

Hadi Shabazi, the 42-year-old head of an online education centre, said the Iranian people were "conveying a message of strength and power" by celebrating the festival despite the war.

Eid al-Ghadir is one of the most important dates in the Shia religious calendar, marking the Prophet Mohammed's final sermon before his death in 632.

A few hours before the celebrations began, Iran's supreme leader Ayatollah Mojtaba Khamenei released a written statement in which he warned that Israel and the United States were seeking to divide Iran after a "stinging setback" in the war.

Mrs Rabiei, a retired 58-year-old teacher who declined to give her first name, said Iranians had to turn out because if they didn't "the enemy's vain ambitions and greed would only increase".

Many revellers were out with their families, with one young couple taking the opportunity to get married.

- 'Should not back down' -

Iranian authorities have turned the festival into a major event, but the war was never far away.

An Iranian missile was on display in the middle of the road, with locals gathering around it to be photographed.

"If these officials truly hear the people's voice and if it matters to them, then they should not negotiate and should not back down under any circumstances," said Reyhaneh Ab-Roshan, an 18-year-old student.

Iranian authorities have sought to link negotiations with the United States to Israel's war with Hezbollah in Lebanon, sparked by the militant group attacking Israel in support of Iran.

The Iran-backed group had the support of many in the Tehran crowd in its fight against Israel.

"They need support, enthusiasm, and encouragement, and in a way they need the support of the Iranian people," said Farid Ahmadi, a 29-year-old lawyer.

"We must stand behind them."