TEHERAN (AFP) - Anti-Saudi demonstrators took to the streets of Teheran on Friday (Jan 8) to protest Riyadh's execution of a prominent Shi'ite cleric and after Iran accused its rival of bombing its embassy in Yemen.

Shi'ites also protested in the Saudi city of Qatif, near the hometown of the executed sheikh, Nimr al-Nimr, while in the Pakistani capital, 1,500 people rallied against his execution.

The festering diplomatic crisis between the Middle East's leading Sunni and Shi'ite Muslim powers has raised sectarian tensions across the region and complicated efforts to resolve conflicts in Syria and Yemen.

In a development that could further strain relations, Saudi media reported that four Iranians would go on trial in the kingdom, one for spying and the other three for "terrorism".

Around 1,000 protestors marched through Teheran chanting "death to Al-Saud" - Riyadh's ruling family, according to an AFP photographer.

Others shouted "death to America" and "death to Israel", frequent rallying cries at demonstrations in Iran.

Some carried placards with the picture of Nimr, the cleric and activist whose execution by Saudi Arabia last Saturday unleashed a wave of anger across the Shi'ite world.

Relations between the longtime adversaries hit a fresh low on Thursday when Iran accused Saudi warplanes of deliberately targeting its embassy in Sanaa, damaging the property and seriously wounding a security guard.

The Saudi-led coalition battling Iran-backed rebels in Yemen denied carrying out an attack and insisted the diplomatic mission was "safe", but Teheran said it would take the matter to the UN Security Council.

Iran said it did not want to escalate tensions in the Middle East, but Foreign Minister Mohammad Javad Zarif said in a letter to UN Secretary-General Ban Ki Moon that Riyadh was "spreading delusional hype about Iran" and accused the kingdom of "sectarian hate-mongering".

The Yemeni conflict, which pits Shi'ite Huthi rebels against pro-government forces backed by Riyadh and other Gulf Arab states, is one of the main sources of dispute between Saudi Arabia and Iran.

During weekly prayers in Teheran, influential cleric Ayatollah Mohammad Emami Kashani told worshippers that Riyadh, along with Israel and the United States, was responsible for "all crimes committed against Muslims".

"The Zionist regime plans, the US supports and Saudi Arabia sources the necessary funds," the cleric said, according to state news agency IRNA.

Shi'ite protesters in eastern Saudi Arabia called on Friday for the "death" of the Sunni-majority kingdom's ruling Al-Saud family at a rally to honour Nimr, a witness said.

Pictures from the city of Qatif showed what appeared to be hundreds of demonstrators, many clad in black.

Around 1,500 people also rallied in Islamabad against the execution.

Nimr was executed along with 46 other prisoners who Riyadh said were "terrorists".

In response, protesters in Iran stormed and set fire to the Saudi embassy in Tehran and consulate in the second city of Mashhad.

Iran denounced those attacks, but the repercussions quickly rippled across the region and beyond with Saudi allies Bahrain, Djibouti, Somalia and Sudan following Riyadh's example and cutting diplomatic ties with Teheran.

At the same time, the United Arab Emirates has downgraded relations with Iran, while Kuwait and Qatar have recalled their ambassadors.

Iran hit back on Thursday by announcing a ban on imports from the kingdom, which will reportedly affect goods worth about US$40 million (S$37 million euros).

The latest crisis threatens a fragile UN-backed initiative to end the war in Yemen, where the world body says at least 2,795 civilians have been killed since March.

Special UN envoy for Yemen Ismail Ould Cheikh Ahmed arrived in Riyadh on Friday to meet Yemeni Prime Minister Khaled Bahah, the government's delegation to the talks and political party leaders, as well as senior Saudi officials, the UN said in Geneva.

Iran and Saudi Arabia also support opposing sides in Syria. Teheran is providing military assistance to close ally President Bashar al-Assad against rebel groups, some backed by Saudi Arabia.

The growing tensions have heaped doubt on a UN-backed plan that foresees talks between the Syrian sides this month in a bid to end a war that has claimed more than a quarter of a million lives.

Saudi media said that the four Iranians set to stand trial in Saudi Arabia were arrested in 2013 and 2014, but they were not identified nor were the charges against them spelled out.