At least 56 people were killed in a stampede during the burial procession for Qassem Soleimani, the top Iranian general killed by a US airstrike in Baghdad last week.
Over 200 people were also injured - some of them seriously - and the number of victims was likely to increase, the authorities said.
The panic broke out at the burial in Soleimani's home town of Kerman in south-east Iran, where Tuesday was declared a public holiday in a move aimed at encouraging as many people as possible to pay their respects to the general.
Earlier media reports said hundreds of thousands of people were attending the burial procession with nearly all television stations in the country showing masses of people moving from the city centre to the martyrs' graveyard where Soleimani is to be buried later.
However, the burial could not take place and had to be postponed as there was no way to get Soleimani's corpse to the cemetery through the masses of people in the streets. No new time for the burial was given.
Authorities had earlier asked people to clear the way to the graveyard so that the burial could take place.
"We will get revenge and it will be forceful and hard so that the Americans bitterly regret the act," said Revolutionary Guard Corps (IGRC) chief Hossein Salami, who took part in the funeral procession.
The masses at the event followed Salami's words with chants of "revenge, revenge" and "Allahu akbar" - meaning "God is greatest."
Large funeral processions were held in several other Iranian cities on Monday, with media reporting that millions gathered in Tehran to mourn Soleimani. The ceremony in the capital was led by Khamenei, who appeared emotional as he prayed over the general's coffin.
Soleimani was considered one of Iran's most influential military leaders, wielding influence in Iraq, Syria and other parts of the Middle East.
"With the killing of a high-ranking Iranian officer, the US have taken a dangerous path, which could endanger the entire region very soon," Iranian Foreign Minister Mohammad Javad Zarif said, according to the state-run news agency IRNA.