The paper announced the contest in response to Danish caricatures of the Prophet Mohammed that have outraged Muslims around the world.
State Department spokesman Sean McCormack reiterated U.S. support for freedom of expression, including in Iran, but condemned the Holocaust cartoon contest.
"Any attempt to mock or to in any way denigrate the horror that was the Holocaust is simply outrageous," McCormack said.
McCormack connected the contest to Iranian President Mahmud Ahmadinejad's recent anti-Israeli comments, including his dismissal of the Nazi genocide of 6 million Jews as a myth.
In its announcement, the "Hamshahri" newspaper said it wanted to test whether Western countries would extend freedom of expression to cartoons about the Holocaust.
President Ahmadinejad visiting the tomb of Ayatollah Ruhollah Khomeini in October (Fars)
READEach year in Iran, the last Friday of Ramadan is celebrated as Qods (Jerusalem) Day, officially a day for expressing solidarity with the Palestinian people.
"I have been notifying the Muslims of the danger posed by the usurper Israel," Ayatollah Ruhollah Khomeini, father of Iran's Islamic Revolution, said in an August 1979 announcement. "I ask all the Muslims of the world and the Muslim governments to join together to sever the hand of this usurper and its supporters...and, through a ceremony demonstrating the solidarity of Muslims worldwide, announce their support for the legitimate rights of the Muslim people..." (more)
INTERVIEW: On December 22, 2005, RFE/RL's Radio Farda spoke with FRED ZEIDMAN, director of the U.S. Holocaust Memorial Museum in Washington, D.C. Zeidman commented on Iranian President Mahmud Ahmadinejad's anti-Israeli comments.
ARCHIVE: For an archive of RFE/RL's coverage of Iran, click here.