"Hundreds of people are in Vanak square, chanting ‘death to the dictator.' Others are also honking car horns," said the witness on Thursday. "Hundreds of riot police are there as well."
The witness said riot police tried to disperse protesters.
"They are telling protesters to leave the area or face being arrested," the witness said.
The election and protests that followed, some of them the biggest anti-government demonstrations the Islamic Republic has ever seen, have exposed deep divides among Iran's political and clerical elite.
Mousavi and the other defeated pro-reform candidate Mehdi Karoubi say the election was rigged and the next government will be illegitimate -- defying Supreme Leader Ayatollah Ali Khamenei, who has formally endorsed Ahmadinejad.
Authorities say the vote was "the healthiest" election since Iran's 1979 Islamic revolution. Leading reformists, who support Mousavi, boycotted Ahmadinejad's inauguration ceremony, defying Khamenei's call to preserve unity after the vote.
The Etemad-e Melli newspapers said on Thursday at least 55 moderate and several hardline lawmakers were also absent from the ceremony. Hundreds of pro-Mousavi supporters gathered near parliament, where the ceremony was held.
Ahmadinejad has been criticized by some hard-liners angered by his initial choice of Esfandiar Rahim-Mashaie as his first vice-president. They were further upset when he took a week to obey Khamenei's order to dismiss Mashaie.
A few hours after Ahmadinejad took the oath of office, Karoubi said moderates would continue their "fight" over the vote, criticizing the authorities for "suppressing street protests," his Web site Etemademelli reported.
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