A crowd of over 1,000 people tonight attempted to storm the Danish embassy in Tehran, which sits behind a high wall in the north of the city.
After they rammed the metal gate to the compound, police drove them back with teargas and arrested some.
Firefighters were seen trying to put out a fire inside, apparently caused by a firebomb.
Earlier, hundreds of demonstrators pelted the Austrian embassy compound with petrol bombs and rocks late, as protests over cartoons portraying the Prophet Mohammed spread across the Muslim world.
Denmark had previously asked the Iranian authorities to increase security at the embassy, following weekend attacks on its embassy in Damascus and its consulate in Beirut, which were both burned by angry demonstrators.
Iran's commerce minister announced today, however, that all trade with Denmark had been suspended.
Anger at the cartoons rose across east Africa: at least one person was killed in a protest in Somalia and Djibouti banned the
import of Danish products.
In Kenya, the country's main Islamic group announced plans for a mass protest against Denmark.
Qatar's Chamber of Commerce said it had halted dealings with Danish and Norwegian delegations, urging Muslim states to do the same. In Bahrain, parliament formed a committee to contact Arab and Islamic governments to enforce the boycott.
In Strasbourg, the Council of Europe described as 'unacceptable' the violence of the past few days.
Freedom of opinion and expression is protected by European human rights law, 'even in cases when the views expressed were offensive,' said Secretary General Terry Davis.
Denmark told its nationals to avoid Muslim countries even as it pursued diplomatic efforts to defuse tension over the publication of the cartoons.
The foreign ministry warning lists 14 Muslim countries travellers should avoid following violent protests against the
cartoons, which first appeared in a Danish daily.
They are Afghanistan, Algeria, Bahrain, Egypt, Iran, Jordan, Libya, Morocco, Oman, Pakistan, Qatar, Sudan, Tunisia and the United Arab Emirates.
Protests in Asia
Earlier today, there were demonstrations and riots across muslim Asia against the cartoons
Authorities in Afghanistan say three people have been killed during clashes between police and protestors.
Two were killed in gunfire from among protestors at the main gates of Bagram Airbase, 60km north of the capital Kabul. A crowd of about 5,000 people had gathered to protest outside the US-led coalition's Bagram headquarters.
Five protestors and eight police officers were wounded in the incident.
And in the eastern province of Lakhman, a third protestor died after being shot during a demonstration.
In Somalia, a 14-year-old boy was shot dead and several others were injured after crowds attacked police.
There have also been demonstrations in Indonesia, India, Gaza, Thailand and New Zealand.
The cartoons were first published in a Danish newspaper in September and have since been reprinted in several publications, most of them European.
UK police have govt support
The British government has said the behaviour of some Muslim demonstrators outside the Danish Embassy in London in recent days was completely unacceptable.
A Downing Street statement added that the police would have the government's full support in any actions they wished to take as a result of the protests.
Police have been criticised for failing to arrest some of the London demonstrators, as they carried signs threatening to kill those who published the cartoons of the Prophet Mohammed.
Earlier, some of Lebanon's political leaders accused Syria of being behind the attack on the Danish embassy in Beirut yesterday.
The mission was ransacked and burnt during the violent protests.
The attack on the embassy has resulted in the resignation of Lebanon's Interior Minister, Hassan Sabeh.