Lawmakers had last month approved a bill to allow abortions when a mother’s life was in danger or the baby would be handicapped.
Some lawmakers who backed the bill had said a handicapped child could be a financial burden on a family.
The Guardian Council, a 12-man watchdog composed of six lawyers and six clerics which vets all legislation in Iran, rejected this argument.
“Abortion is against Islamic Shari’a law in cases where the child would cause difficulties for his parents after birth due to mental or physical handicap,” the council said in a letter to parliament.
It was not clear whether the council agreed with allowing abortions when the mother’s life was endangered.
Parliament can revise the bill and resubmit it to the council.