Iran's official news agency says a suicide attack killed 19 people and wounded 125 others at a Shi'ite mosque in Zahedan, the capital of Sistan-Baluchistan province near Iran's border with Pakistan.
Provincial governor Ali-Mohammed Azad told the IRNA news agency the bombing Thursday was a terrorist act, and that the government has already arrested the perpetrators.
Azad said the bombers had been planning additional attacks. He said the attacks were meant to destabilize the province as it prepares for June 12 presidential elections.
There has been no immediate claim of responsibility.
Zahedan, a mainly Sunni city in mainly Shi'ite Iran, has seen sectarian violence before. In 2007, a bomb attack in Zahedan killed at least 11 members of Iran's elite Revolutionary Guards. The Sunni militant group Jundallah claimed responsibility for the attack.
Security forces and drug smugglers also have clashed in the area.
Azad said Thursday's bomb exploded during evening prayers, when worshippers were inside the mosque.
Campaigning has been under way in Iran in preparation for the upcoming presidential election. President Mahmoud Ahmadinejad is seeking a second term and faces three challengers.
Some information for this report was provided by AFP, AP and Reuters.