The powerful explosions just opposite the multi-storey embassy caused chaos, ripping the facades off nearby buildings and setting cars ablaze.
They come after two other bomb attacks this year in the southern suburbs of Beirut that are the bastion of the powerful Lebanese Shia movement Hezbollah.
The group, which is sponsored by Iran, has drawn controversy for sending thousands of fighters to support the regime of Syria's President Bashar al-Assad as he battles a 32-month-old uprising.
And the government in Damascus was quick to condemn the mid-morning blasts.
"The Syrian government firmly condemns the terrorist attack carried out near the Iranian embassy in Beirut," state television said.
It said an "odour of petrodollars comes from all the terrorist acts against Syria, Lebanon and Iraq," an apparent reference to Saudi Arabia and Qatar, which back the Syrian uprising.
Iran also condemned the blasts, accusing Israel and its "mercenaries" of responsibility. Israel immediately denied involvement.
The Lebanese health ministry said the toll from the attacks stood at 23 dead and 146 wounded.
Among those killed, a government source said, was Sheikh Ibrahim Ansari, a cultural adviser at the embassy.
"He was entering the embassy when a blast took place. He was seriously wounded and died in hospital," the source said.
This was confirmed by the foreign ministry in Tehran, which said he was a mid-ranking Shiite cleric of Iranian nationality.
A senior security source, speaking on condition of anonymity, confirmed the attack involved two blasts.
"We can't yet say whether they were suicide attacks or bombs that were detonated from a distance," the source said, adding that the Iranian embassy was "probably" the target.
The ambassador, Ghazanfar Rokn-Abadi, said all staff inside the embassy at the time of the attack escaped unharmed.
"All colleagues inside the embassy are in full health," he said, quoted by Mehr news agency.
An AFP correspondent at the scene described blood and glass on the streets and Lebanese media broadcast harrowing images of charred bodies, some still on fire, on a street lined by blazing cars and strewn with the rubble.
Residents walked dazed and in shock past blackened trees and cars.
"The situation is very hard," said Farah, a resident in her 30s.
"There is a lot of savagery. People want to live. After this kind of thing we are paralysed for days. Thank God my children were at school."
At the nearby Rasul Aazem hospital, which received the bodies of seven people killed in the blasts, relatives waited to hear news of their loved ones while others queued to donate blood.
Hezbollah, which is fighting alongside the Assad regime in war-hit Syria, has seen its strongholds in southern Beirut targeted twice by car bombs this year.
The blasts, on July 9 and August 15, killed 27 people.
Tensions in Lebanon over the conflict ravaging Syria have been rising, with Hezbollah's involvement criticised by many Sunni Lebanese who back the Sunni-dominated uprising against Assad.
But Hezbollah chief Hassan Nasrallah pledged just last week that he would not withdraw his forces from Syria.
"We have said on several occasions that the presence of our soldiers on Syrian soil is to defend... Syria, which supports the resistance" against Israel, Nasrallah said.
"So long as that reason exists, our presence there is justified," he added, addressing supporters at a religious rally in the southern suburbs of Beirut.
Nasrallah's defiance was echoed by some residents after the twin blasts.
"Even if they do a million explosions, we will not leave the area," said Ali, accusing "Salafis from Syria" of being behind the attacks.
"We are not afraid so long as God is with us and Hassan Nasrallah is with us," he added.
COMMENTS (7)
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@Hilarious:
You Sir, are either totally bias or totally ignorant.
@rasgullah:
Saudi connection is more likely.
@All Let the truth reveal . Then we can see whether they were Pakistanis or any other nationalists . But one thing which all must agree upon i.e it is the handiwork of sunni terrorists. Come on, Please call spade a spade.
@ghulabjaman: then what about reality? how much negative is associated with that?
There must be a Pakistani connection to this.