The vast rejection of candidates -- monitors said about 60 percent of more than 12,000 would-be MPs were barred -- could damage the credibility and legitimacy of the February 26 ballot, analysts said.
Those seeking to become lawmakers in Iran must first be screened by the Guardian Council, a conservative-dominated committee of clerics and jurists, before running.
The vetting procedure has been contentious for months, as the poll is an opportunity for reformists and moderate politicians to make gains against a currently dominant conservative camp in parliament.
Rouhani is hoping his allies can capitalise in the elections after Saturday's implementation of Iran's nuclear deal with world powers lifted longstanding sanctions.
More From This Section
Ali Motahari, an outspoken conservative lawmaker, was among incumbents rejected this time round, media reported.
"Out of more than 12,000 registered candidates, 4,700 -- or about 40 percent -- were approved," Siamak Rah-Peyk, a spokesman for the Central Elections Supervising Committee was quoted as saying by state television.
Hossein Marashi, an official from the reformist camp, was quoted by the Shargh daily as saying that "out of over 3,000 reformist candidates across the country, only 30 have been approved -- only one percent."
"We are supposed to present a list of 30 candidates. How are we supposed to do that with just four names?" Marashi added.