UPDATE 2105 GMT: Press TV says Iranian authorities have arrested two suspects.
UPDATE 1905 GMT: Iranian Foreign Ministry spokesman Ramin Mehmanparast has found both the culprit and the motive for the bombing: "The terrorist attack in Mahabad is the reaction of Israeli agents and the supporters of the Zionist regime to the country's defensive prowess in the Sacred Defense Week [commemorating the Iran-Iraq War] and the successes of the Islamic Republic of Iran's active diplomacy in the biggest international arena in New York. This terrorist attack coincided with the influential presence of the Iranian delegation headed by Dr. Ahmadinejad in New York and his influential public diplomacy in raising public awareness as well as his defense of our country's rightful stances."
UPDATE 1835 GMT: Press TV now reports 12 killed and 70 wounded.
UPDATE 1550 GMT: Both the Kurdish Democratic Party and the Kurdish separatist group PJAK have denied involvement in the bombing and condemned the attack.
UPDATE 1325 GMT: Iranian authorities now say 10 people were killed and 57 wounded in the Mahabad bombing.
A state radio report said the device was detonated on a timer and had been placed under a bush near the route of a military parade.
The victims reportedly were in the area for female spectators, and Iranian media reported that the dead included the wives of two ranking military officers.
Bloomberg are reporting 11 dead and 67 injured.
Homy Lafayette has a full account of developments.
Iranian state media are reporting that nine people have been killed and 20 injured in a terrorist attack in Mahabad in West Azarbaijan Province in the northwest of the country.
The Governor-General of West Azarbaijan, Vahid Jalalzadeh, gave the news to the Islamic Republic News Agency. The attack took place as people were watching a military parade during Sacred Defense Week, which commemorates the 1980-1988 Iran-Iraq War.
Jalalzadeh said, ""Anti-Revolution agents have always carried out such brutal acts to take revenge on the people of Mahabad."