President Hassan Rouhani on Sunday accused his hardline critics of wanting to deprive Iranians of the basic joys of life and isolate the country, as an aide said he had decided to run for a second term, state media reported.

Iran will hold a presidential election on May 19, but Rouhani, a moderate who is eligible to seek a second four-year term, has stopped short of saying he would run to push ahead with reforms resisted by powerful hardliners.

"Soon it's the (Iranian) New Year, so let the people have some joy," Rouhani, who has advocated greater social freedoms, said in a speech carried live on state television.

"How come crying a lot is halal (allowed under Islam) and if we laugh it's haram (banned)," Rouhani said, in an apparent reference to hardliners who control the police and security bodies and promote an austere interpretation of Islam.

Rouhani's remarks at a meeting on public health came on the same day as a top aide said he decided to run for re-election.

"In recent weeks, Mr. Rouhani has reached the conclusion to take part in the presidential election," said vice president for parliamentary affairs Hosseinali Amiri, quoted by the state news agency IRNA.

In his speech, Rouhani said his government stood for opening Iran up to the outside world while his opponents sought confrontation and isolation.

"We are a government that says we should use foreign capital," said Rouhani, a pragmatist who was elected in 2013.

Rouhani also hit out at hardline critics who have accused officials of going on a "luxury" buying spree as Iran made deals with Airbus and U.S. rival Boeing last year to purchase about 180 passenger planes.

"We say if our aircraft fleet is in need of new planes we should buy them. But some say it's honourable to use old equipment," he said.

The purchases were the first direct deals by Tehran to buy Western-built aircraft in nearly 40 years to revamp its ageing fleet.

"We are steadfast in our principles and we don't compromise on them, but we should talk to the world, engage and cooperate with it," said Rouhani, rejecting accusations that his policies amounted to selling out the principles of Iran's 1979 Islamic Revolution.

Rouhani struck a deal in 2015 with world powers on curbing Iran's nuclear programme in exchange for relief from sanctions and has sought to open Iran's economy to foreign investors and improve relations with the West.