Iran's supreme leader Ayatollah Ali Khamenei blasted the "incompetence" of the Saudi royal family as he met with the families of victims of a deadly stampede during last year's hajj.
"This incident proves once again that this cursed, evil family does not deserve to be in charge and manage the holy sites," Khamenei said.
Relations between Iran and Saudi Arabia were already at rock bottom before the regional rivals started trading caustic remarks ahead of the annual pilgrimage to Islam's holiest places in Saudi Arabia, which is due to start on Saturday.
"If the existing problems with the Saudi government were merely the issue of the hajj... Maybe it would have been possible to find a way to resolve it," Iranian President Hassan Rouhani said at a cabinet meeting.
"Unfortunately, this government by committing crimes in the region and supporting terrorism in fact shed the blood of Muslims in Iraq, Syria and Yemen," Rouhani said.
The week began with a furious rebuke from Khamenei, published on his website, in which he accused the Saudi royals of "murder" over the deaths of nearly 2,300 pilgrims, including hundreds of Iranians, in last year's stampede.
But the head of the six-nation Gulf Cooperation Council hit back today, calling Khamenei's remarks "inappropriate and offensive... And a desperate attempt to politicise" the hajj.
Saudi Arabia's most senior cleric, Grand Mufti Abdulaziz al-Sheikh, also waded into the dispute, telling the Makkah daily yesterday: "We must understand these are not Muslims, they are children of Magi and their hostility towards Muslims is an old one."
Jane Kinninmont, deputy head of the Middle East and North Africa programme at the Chatham House think tank in London, said the world needed to pay more attention to the "cold conflict" between Iran and Saudi Arabia.
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