Hamshahri, which is among the top five of Iran's mass circulation papers, made clear the contest is a reaction to European newspapers' publication of Danish cartoons of the Prophet Muhammad, which have led to demonstrations, boycotts and attacks on European embassies across the Islamic world.
Hundreds of Iranians hurled stones, and sometimes gasoline bombs, at the Danish and Austrian embassies in Tehran in protest against the cartoons on Monday. The Austrian mission was targeted as the country currently holds the EU presidency.
The newspaper said Tuesday the contest would be launched on Feb. 13 and would be co-convened by itself and the House of Caricatures, a Tehran exhibition center for cartoons. Both the paper and the cartoon center are owned by the Tehran Municipality, which is dominated by allies of President Mahmoud Ahmadinejad, who is well known for his opposition to Israel.
Last year Ahmadinejad provoked outcries when he said on separate occasions that Israel should be "wiped out" and the Holocaust was a "myth."
Hamshahri invited foreign cartoonists to enter the competition and said it wanted to see how open the West was to caricatures of the Holocaust.
"Does the West extend freedom of expression to the crimes committed by the United States and Israel, or an event such as the Holocaust? Or is its freedom only for insulting religious sanctities?" Hamshahri wrote, referring to the Prophet Muhammad cartoons, in a short article on its back page.
The paper disclosed its plan to hold the competition in an inside page on Monday, saying it would announce details on Tuesday. But Tuesday's edition said the plans would be published next Monday.
Meanwhile, state television reported Tuesday that Iranian Foreign Minister Manouchehr Mottaki had called his Danish counterpart, Per Stig Moeller, and urged Copenhagen and other European governments to "compensate for their mistake" in publishing the drawings.
The Foreign Ministry also summoned the Bulgarian ambassador to protest the publication of the prophet cartoons in Bulgarian newspapers, the television said.
The Prophet Muhammad cartoons were first commissioned and published by a Danish newspaper in September. As Muslim protests mounted, numerous European newspapers have reprinted them in recent days in the name of free expression, provoking wider and angrier protests.
The cartoons touched a raw nerve, partly because most Muslims forbid any illustration of the prophet for fear of idolatry and partly because several drawings portrayed Muhammad as a man of violence. One cartoon depicted the prophet as wearing a turban in the shape of a bomb with a burning fuse.