Tehran's mayor, Mohammad Baqer Qalibaf, has been re-elected in a move seen as a victory for pragmatic conservatives within the Iranian establishment.
Mr Qalibaf was the youngest candidate in 2005's presidential poll
Mr Qalibaf stood against Iran's hardline leader, Mahmoud Ahmadinejad, in the 2005 presidential election.
There has been speculation the mayor could be using his position as a stepping stone to standing against Mr Ahmadinejad in the next election.
Before becoming mayor of the capital, Mr Qalibaf was Iran's police chief.
In a closely fought election, Mr Qalibaf stood against two other conservative candidates, one of whom is regarded as being close to Mr Ahmadinejad.
Nuclear official freed
Mr Ahmadinejad himself used the Tehran mayor's post as a stepping stone to running for president two years ago and there has been much speculation that Mr Qalibaf may be attempting the same.
Although he says he is not part of any faction or group, Mr Qalibaf is regarded as a pragmatic conservative, closer in ideology to the man regarded as Mr Ahmadinejad's main political rival, former President Akbar Hashemi Rafsanjani.
Mr Qalibaf's re-election will be seen as a victory for the relative moderates, following increasing criticism of the president's harsh anti-Western rhetoric and his failure to improve Iran's weak economy.
Meanwhile, Iran's official media have announced the release on bail of Hossein Mousavian, a senior member of the country's nuclear negotiating team under the previous reformist government.
Mr Mousavian is also considered to be close to Mr Rafsanjani.
When he was arrested last week, one conservative news agency reported he was to be charged with spying.
But no formal charges have yet been announced and Mr Mousavian has now been freed on bail of around 200,000 dollars.