The council leader in the Iranian city of Shiraz has ordered an investigation after Israeli soldiers featured on a billboard marking the Iran-Iraq war.
The billboard used a photoshopped picture showing the backs of three male soldiers standing on a rocky outcrop.
After it was put up in a square in central Shiraz this week, people noticed the men were wearing Israeli uniforms and carrying M16 rifles.
It also emerged that a female soldier was cropped out of the original photo.
Ever since Iran's Islamic revolution in 1979, the country's leaders have called for Israel's elimination. They reject Israel's right to exist, considering it an illegitimate occupier of Muslim land.
Israel v Iran in 300 words
Pictures of the controversial billboard commemorating the 1980-88 war between Iran and Iraq first appeared online on Wednesday.
One Twitter user, @mhrezaa, wrote: "I felt burnt when I saw this billboard in the middle of Sacred Defence Week."
"M16 guns, straps, clothes, hat on their shoulders; all of these belong to Zionists. In the best case scenario I can say you did something idiotic."
The Israeli foreign ministry's Persian Twitter account also mocked the billboard, and noted that Iranians had posted images showing it being taken down overnight.
On Thursday morning the head of the city council, Seyyed Ahmad Dastgheyb, ordered cultural officials to carry out an urgent investigation, local media reported.
If it was confirmed a picture of soldiers of the "usurper Zionist regime" had been used, he said, it would be "necessary to deal seriously with those responsible".
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