BERLIN, April 20 (AFP) - Despite warnings of retaliation from Iran, Berlin authorities unveiled a plaque Tuesday in memory of four Iranian Kurds shot dead in an attack officially blamed on Tehran.

The plaque -- with the victims' names and the words: "Murdered by the former regime in Iran. They died fighting for freedom and human rights" -- was unveiled by Monika Thiemen, mayor of Berlin's upmarket Charlottenburg district.

Hundreds of people also protested against the Iranian regime.

The September 17, 1992 attack in the Mykonos restaurant soured relations between Iran and Germany for years.

A German court concluded in 1997 that the killers were acting on Tehran's orders, prompting Berlin to recall its ambassador and the European Union to suspend dialogue with the Islamic republic for a year.

On hearing of plans to unveil the plaque, Tehran's mayor threatened to erect one of his own denouncing Germany for supplying chemical weapons to former Iraqi leader Saddam Hussein.

Iran's state news agency IRNA said Mahmoud Ahmadi Nejad had written to his Berlin counterpart Klaus Wowereit saying the Charlottenburg plan for a plaque was "insulting."

Nejad warned of a possible retaliation, saying that his authority was being pressured by the victims of chemical warfare to install a panel listing names of states which equipped Saddam's toppled regime, notably Germany.

Iran and Iraq fought a bitter war in the 1980s.

Thiemen told AFP that the plaque unveiling, due last month, was delayed at the request of the German government, which wanted to avoid any diplomatic embarrassment during a major conference on Afghanistan in Berlin.

"We don't see any reason to renounce the plan, which was decided on by the local council," she said at the time.

"These opposition activists gathered in the Mykonos restaurant to promote human rights in Iran, and were murdered because of it," Thiemen said.