Two Iranian institutions have launched a cartoon competition centred on the theme of Holocaust denial following outrage over those published by Charlie Hebdo.

Iran's House of Cartoon and the Sarcheshmeh Cultural Complex are offering a $12,000 prize to the winner, with $8,000 and $5,000 for the two runners up.

It is the second time the competition has been held; the first was in response to Danish newspaper Jyllands-Postens publishing cartoons depicting the Prophet Muhammad in 2006.

"Why is it acceptable in Western countries to draw any caricature of the Prophet Muhammad, yet as soon as there are any questions or doubts raised about the Holocaust, fines and jail sentences are handed down?" Shojaei-Tabatabaii, director of the House of Cartoon, said at the time.

"It is surprising that they allow disrespect toward different religions with insulting pictures and there is no reaction to them in the West, but when people question the Holocaust, they adopt such a stance toward it.

"The freedom of speech that the Westerners talk about is nothing more than a slogan."

17 journalists were killed by jihadists at the offices of satirical magazine Charlie Hebdo on 7 January in Paris in retaliation of cartoons featuring the Muslim Prophet. The murders sparked debates about the freedom of speech and the right to satirise religion.

Iranian President Hassan Rouhani denounced the attack, saying: "Those who kill and carry out violent and extremist acts unjustly in the name of jihad, religion or Islam provoke Islamophobia whether they wish it or not".

"Violence and terrorism is reprehensible whether in this region, in Europe or in the United States," Rouhani added.

However, a spokeswoman for the country's foreign minister said that the Charlie Hebdo cover, printed a week after the violence, "insults Islam and also causes extremism between religions".

The cover, showing the Prophet Muhammad holding a 'Je suis Charlie' sign under the banner "Tout est pardonné (All is forgiven), triggered protests throughout many Muslim-majority countries, including Pakistan, Jordan and Algeria. Bishops in Niger were forced to suspend activities at Catholic schools, health care facilities and charities after dozens of churches were subject to arson attacks and at least 10 people were killed.

The second International Holocaust Cartoons Contest will end on April 1. The best entries will go on show at the Palestine Museum of Contemporary Art in Tehran, in addition to several other places across the city.