UPDATE 1-Obama urges Iran stop 'violent and unjust actions'

* Iran must "govern through consent, not coercion" -Obama

* Obama closely monitoring Iran situation -White House (Adds background, additional Obama quotes)

By Doug Palmer

WASHINGTON, June 20 (Reuters) - U.S. President Barack Obama urged the Iranian government on Saturday to "stop all violent and unjust actions against its own people" as protests continued in Iran against the alleged rigging of last week's election.

"The Iranian government must understand that the world is watching. We mourn each and every innocent life that is lost," Obama said in a statement.

"The universal rights to assembly and free speech must be respected, and the United States stands with all who seek to exercise those rights," he said.

Obama's most forceful comments yet on the government crackdown in Iran came as opposition leader Mirhossein Mousavi said he was "ready for martyrdom," according to a Mousavi ally, in leading protests that have brought warnings of bloodshed from Iran's supreme leader, Ayatollah Ali Khamenei.

Riot police were deployed in force in Tehran on Saturday, firing teargas and using batons and water cannon to disperse protesters, although the estimated crowd of 2,000 to 3,000 on the streets was much smaller than previous demonstrations.

White House officials said Obama, who again refrained from commenting directly on Iranian politics or on the fairness of the disputed election, had been receiving intelligence updates throughout the day on the situation in Iran and meeting with his senior advisers.