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"Seventeen people are dead and 37 injured people have been transferred to hospital," emergency services spokesman Mojtaba Khaledi told state television.
"The number of the dead may rise as most of the injured are in critical condition," he said, adding that "24 ambulances and three helicopters have been dispatched to the scene."
|At least 17 killed in train derailment in central Iran, photo AFP|
Tabas is located in South Khorasan province roughly 900 kilometres (560 miles) by road from Tehran.
The deputy head of Iran's state-owned railways, Mir Hassan Moussavi, told the state broadcaster that the train was carrying 348 passengers.
It "derailed after hitting an excavator" that was near the track, he said.
Some of the injured were airlifted to hospital by helicopter, state television footage showed.
Rescue teams inspected the oveturned carriages as onlookers gathered nearby, pictures posted by the ISNA news agency showed.
One of the pictures showed a yellow excavator on its side by the track.
Five of the train's 11 coaches came off the track in the 5:30 am (0100 GMT) accident, the Iranian Red Crescent's head of emergency operations, Mehdi Valipour, told state television.
The Tabas prosecutor visited the scene as a judicial investigation was launched into the cause of the accident, Iranian media reported.
The train derailment comes after a tower block collapsed in southwestern Iran last month killing at least 43 people.
The collapse of the 10-storey Metropol building, which was under construction in Abadan, sparked angry protests in solidarity with the families of the dead.
The provincial judiciary said it had arrested 13 people, including Abadan's mayor and two former mayors, suspected of being "responsible" for the tragedy.
The disaster was one of Iran's deadliest in years and sparked a demonstrations across the country against authorities accused of corruption and incompetence.
In 2016, two trains collided and caught fire in northern Iran, killing 44 people and injuring dozens.
The then head of Iranian railways resigned after four of his employees were arrested following the collision on the main line between Tehran and second city Mashhad.