* Execution adds to mounting tension between regional rivals
* Iran saw Nimr as champion of oppressed Shi'ite minority
* Saudi Arabia and Iran back rival groups in Syria and Yemen
* Shared threat in form of Islamic State fails to forge unity (Recasts with context on Saudi-Iranian relations)
By Sam Wilkin
DUBAI, Jan 2 (Reuters) - Iranian clerics, officials and students attacked Sunni Muslim-ruled Saudi Arabia on Saturday for executing Shi'ite cleric Nimr al-Nimr, a move that seemed to further doom any hope of rapprochement between two ideologically opposed powers vying for influence across the region.
Nimr, executed along with three other Shi'ites and dozens of al Qaeda members, is seen in Iran as the champion of a Shi'ite minority oppressed in Saudi Arabia, and Tehran had made clear that it saw the terrorism charges against him as fabricated.
Iran summoned the Saudi charge d'affaires in Tehran, accusing the kingdom of using terrorism as a pretext to suppress peaceful dissent among Shi'ites, who complain of systemic discrimination.
And the website of Iran's Supreme Leader, Ayatollah Ali Khamenei, carried a picture of a Saudi executioner next to notorious Islamic State executioner 'Jihadi John', with the caption "Any differences?".
The fact that both Saudi Arabia and Iran face a powerful threat to their interests from the radical jihadist group, which has seized large parts of Syria and Iraq, appeared at the end of 2014 to be promoting a tentative reconciliation.
But since then, the political and economic tensions have been piling up.
Already backing opposing sides in Syria's civil war, they also found themselves backing rival groups in Saudi Arabia's impoverished neighbour Yemen, where Iran supports another minority Shi'ite group, the Houthis, who drove out the Saudi-backed government.
Economic rivalry has also come to the fore since Iran signed a nuclear deal with world powers in July that Saudi Arabia had urged its long-standing ally and protector, the United States, to block.
The deal will free Iran from crippling sanctions and open its export taps just as its fellow OPEC powers struggle with a plunge in crude prices to their lowest levels in over a decade.
Even September's annual haj pilgrimage, where Sunni and Shi'ite pilgrims mingle under Saudi custodianship, proved inflammatory when hundreds of Iranians died in a stampede.
On Saturday, Iranian officials again denounced the Saudi ruling family, as protesters gathered at the Saudi embassy in Tehran and students marched through the Shi'ite holy city of Qom.
Foreign Ministry spokesman Hossein Jaber Ansari had said on Monday there had been diplomatic contacts between Tehran and Riyadh on a range of issues.
But after the execution, in remarks carried on state television, he said: "The Saudi government supports terrorists and takfiri (radical Sunni) extremists, while executing and suppressing critics inside the country."
Iranian media carried reports of reactions from around the world, litanies of alleged Saudi misdeeds, and even elegiac poetry dedicated to Nimr, some of it addressing Saudi Arabia's King Salman.
"No matter if you execute him, Nimr will never die, Salman; the martyrs are alive and blessed, as the Lord said in the Quran," began a Farsi poem published by the Tasnim news agency.
Many in Iran also accused Saudi Arabia of fomenting takfirism, a radical Sunni ideology espoused by groups such as Islamic State that regards Shi'ism and other Islamic sects as heretical.
"There is no more room to doubt that the (house of) Al Saud are the source of takfirism in the world," said Ayatollah Nasser Makarem-Shirazi, one of Iran's most senior establishment clerics. (Reporting by Sam Wilkin; Editing by Kevin Liffey)
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