Recorded on a smartphone and uploaded multiple times on YouTube, the clip shows three unveiled girls dancing and singing to the song in a room, on rooftops and in secluded alleys with three young men.
For the youths, the home-made video now watched more than a million times was merely an "excuse to be happy," but for the authorities it was "vulgar" breach of the Islamic republic's values.
The seven were arrested in May and released on bail after appearing on state television and expressing remorse for appearing in the clip.
They were subsequently tried and convicted of "the illegal distribution of a film" and "illicit relations," lawyer Farshid Rofougaran told AFP.
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One girl dancer was sentenced to a year in prison and 91 lashes for posting the footage online, while the five other dancers and the clip's director were sentenced to six-month terms and 91 lashes.
All of the sentences were suspended for three years.
The United States said it had been following the case closely and with "great concern."
Washington urged Iran "to respect human rights that are protected by its own constitution as well as its international obligations," he told reporters.
Rofougaran said he did not know whether his clients wished to appeal the sentence, which was notified to him orally by a Tehran court.
Human rights groups denounced the ruling.
"With these sentences, the absurd meets the unjust," Amnesty International said.
If confirmed, the sentences "would be a ludicrous outcome; these individuals will have been convicted and branded criminals purely for making a music video celebrating happiness."