Thousands of Iranians chanted "Death to America " as they staged a mass protest Thursday against the "Great Satan" to mark the 31st anniversary of the capture of the American embassy by Islamist students.

Tehran , meanwhile, welcomed Washington 's decision to list shadowy rebel group Jundallah as a foreign terrorist organisation, saying it is the "right" move, but reiterated its allegation that the U.S. supports the Sunni network.

On Nov. 4 each year Iran marks the anniversary of the capture of the U.S. embassy by Islamist students in Tehran in 1979, months after the Islamic revolution which toppled the U.S.-backed shah.

On Thursday, waving Iranian flags and carrying anti-US banners alongside posters of Iran 's supreme leader Ayatollah Ali Khamenei, the largely young crowd also shouted anti-Israel slogans outside the now closed U.S. embassy.

The embassy has remained shuttered and the U.S. and Iran have had no diplomatic ties since then.

The students, who took 52 American diplomats hostage for 444 days, said they were responding to Washington 's refusal to hand over the deposed shah, Mohammad Reza Pahlavi.

This year's anti-U.S. protest, one of the cornerstones of the Islamic regime, came days before expected nuclear talks which will see U.S. and Iranian officials sitting at the same table for discussions on Tehran 's controversial atomic program.

World powers led by U.S. suspect Iran 's atomic drive is aimed at making weapons, a charge denied by Tehran .

On Wednesday, Khamenei praised the embassy takeover 31 years ago and expressed his distrust of U.S. leaders.

"This act is the symbol of courage and intrepidness of the young revolutionary generation against the grandeur of America , because the capture of the den of spies [ U.S. embassy] destabilized the power of America ," he told a gathering of students on the eve of the anniversary.

Crowds of people also hurled eggs and tomatoes at the U.K. 's Tehran embassy in protest after MI6 chief John Sawers said last week espionage was key to curbing Iran 's nuclear drive, state news agency IRNA reported.

Not all words directed Thursday at the U.S. were hostile, however, with the Islamic republic welcoming a Washington decision to label Jundallah (Soldiers of God) as a foreign terrorist group.

"Fighting terrorism is a general responsibility of all nations and the Islamic Republic of Iran in this regard considers placing [Abolmalek] Rigi's terrorist group on the U.S. national list of terror organizations as a move in the right direction," foreign ministry spokesman Ramin Mehmanparast said.

However, he reiterated Iranian accusations that Washington supports the group.

The U.S. on Wednesday officially designated Jundallah a foreign terrorist organization, blaming it for a series of attacks in Iran .

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