Supporters of Iranian President Mahmoud Ahmadinejad react as he speaks at a rally in Tehran.

Iranian President Mahmoud Ahmadinejad, who was running for a second term, was declared the winner of Iran's June 12th election by a substantial margin. His chief rival, Mir Hossein Mousavi, has charged voter fraud. Supreme Leader Ayatollah Ali Khamenei has directed the Guardian Council to investigate the claims of fraud.

Meanwhile thousands of Mousavi and Ahmadinejad supporters have taken to the streets in peaceful demonstrations. Some peaceful demonstrations have been met with force by police and other security officials.

President Barack Obama noted that the election results in Iran are difficult to assess because no international election monitors were present during the election. He said Iran needs to take seriously the accusations of fraud and examine them thoroughly:

Supporters of reformist presidential candidate Mir Hossein Mousavi carry his poster during a rally.

"I can't state definitively one way or another what happened with respect to the election. But what I can say is that there appears to be a sense on the part of people who were so hopeful and so engaged and so committed to democracy who now feel betrayed. And I think it's important that, moving forward, whatever investigations take place are done in a way that is not resulting in bloodshed and is not resulting in people being stifled in expressing their views."

President Obama said the U.S. will continue to pursue engagement with Iran using tough diplomacy with no illusions on a range of issues related to America's national security:

"Specifically, making sure that we are not seeing a nuclear arms race in the Middle East triggered by Iran obtaining a nuclear weapon, making sure that Iran's not exporting terrorist activity. Those are core interests not just to the United States but I think to a peaceful world in general."

But, said President Obama, "it would be wrong of me to be silent about what we've seen on the television over the last few days. And what I would say to those people who put so much hope and energy and optimism into the political process. . . . the world is watching and [is] inspired by their participation, regardless of . . . .the ultimate outcome of the election. And they should know the world is watching."