Germany is facing accusations of being pro-regime because of its decision to allow sanctuary and medical treatment for an alleged mass murderer from the Islamic Republic.
The possible successor of supreme leader Ali Khamenei, Ayatollah Shahroudi, is currently in a neurological centre for treatment in the German city of Hanover.
Footage of protests outside the hospital have been shared on social media.
“The nationwide protests against the Islamist mullah regime in Iran make it obvious that the federal government’s Iran policy has reached a dead end,” said a statement from Ulrike Becker, a spokesperson for the German-based Stop the Bomb campaign. “For decades, Germany’s Iran policy has supported an Islamist dictatorship that today can only be upheld with utmost violence against its own people.
“We demand an end of the collaboration with a terror-spreading regime which is rejected internally and externally, by the people of Iran and by Iran's neighbors. We expect clear political support of the demands for freedom and democracy in Iran.”
German foreign minister Sigmar Gabriel responded by saying: "We appeal to the Iranian government to respect the rights of the demonstrators to assemble and to peacefully raise their voices," he said. "After the confrontations of recent days, it is all the more important that all sides refrain from violent actions."
A spokesman for Angela Merkel confirmed last week that "Germany is still one of the most important trade partners of Iran".
A German government briefing earlier this week said the government is closely "watching what is happening on the ground" in Iran because the "situation remains unclear".
The spokesman at the briefing said an "improvement in the human rights situation is an important concern."