TEHRAN - Mahmoud Ahmadinejad was sworn in as Iran's president on Wednesday in a ceremony boycotted by reformist leaders and parliamentarians and marred by street protests over his victory.

The 53-year-old hard-liner took his oath of office nearly eight weeks after a disputed election that unleashed the worst unrest since the 1979 Islamic revolution and divided the political and clerical elite.

Ahmadinejad said Iran wanted peaceful coexistence with the world but would resist any bullying power.

Internationally, we seek peace and security. But because we want this for all of humanity, we oppose injustice, aggression and the high-handedness of some countries, he said.

Former presidents Mohammad Khatami and Akbar Hashemi Rafsanjani, who support Mousavi, boycotted the inauguration. The official IRNA news agency said most of parliament's 70 reformist legislators also stayed away.

Riot police were out in force in nearby streets. Witnesses said hundreds of supporters of Ahmadinejad's main political rival, Mirhossein Mousavi, gathered near parliament.

I was beaten by police who wanted to disperse protesters, said a witness, who declined to give her name.

Another witness said dozens of protesters gathered at the vicinity of Tehran's Bazaar.

They were chanting Allah-u Akbar (God is greatest) and Mousavi we support you. But riot police dispersed them, said a witness from southern Tehran, where the Bazaar is located.

Police arrested at least 10 protesters, witnesses said.

President Barack Obama and the leaders of France, Britain, Italy and Germany have all decided not to congratulate Ahmadinejad on his re-election although the White House acknowledged that Ahmadinejad was Iran's elected leader.

Iran is at odds with the West over its nuclear program, which the United States and other powers say is aimed at building an atomic bomb. Tehran says the program is for peaceful energy purposes.

Secretary of State Hillary Clinton said the United States would continue to seek talks with Iran, telling reporters in Nairobi: We don't always get to deal with the government that we want to.

We take the reality that the person who was inaugurated today will be considered the president. But we appreciate and we admire the continuing resistance and ongoing efforts by the reformers to make the changes that the Iranian people deserve.

Clinton said the powers were discussing a package of incentives and sanctions for Iran over the nuclear program

A British Foreign Office spokesman reiterated Britain's concerns over that issue and the human rights situation following the disputed election.
Trying to make progress on these difficult but crucial issues requires hard-headed diplomacy. That does not mean business as usual with Iran, he said in London.

A junior German official observed the inauguration but no message of congratulations was sent.


Ahmadinejad reacted tartly to the cold shoulder.

We heard that some of the Western leaders had decided to recognize but not congratulate the new government, he said. Well, no one in Iran is waiting for your messages.

Ahmadinejad has two weeks to present a cabinet to parliament for approval but may get a rough ride from the conservatives who dominate the assembly, as well as from his moderate foes.

Mousavi and reformist cleric Mehdi Karoubi say the next government will be illegitimate -- defying Supreme Leader Ayatollah Ali Khamenei, who has formally endorsed Ahmadinejad.

Ahmadinejad has also come under fire from some hardliners 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.

Nevertheless, Khamenei described Ahmadinejad as courageous, hardworking and wise at the ceremony on Monday.

At least 20 people have been killed since the June 12 election and hundreds have been arrested.

The authorities opened a mass trial on Saturday for more than 100 reformists on charges of inciting unrest. The next session of what Khatami and Mousavi have denounced as a show trial will take place this coming Saturday.

Iran accuses the West, particularly the United States and Britain, of having fomented trouble after the election, which officials describe as the healthiest in the Islamic Republic's history, in an attempt to topple clerical rule.

(Writing by Alistair Lyon; editing by Angus MacSwan)