A member of the People's Mujahedin Organization of Iran (PMOI) was reported to have died following an unexpected raid by Albanian police on Tuesday on a camp home to the members of the Iranian opposition movement.
The Ashraf 3 camp northwest of Tirana has been home for a decade to thousands of members of the organization, exiled opponents of the government in Tehran.
The PMOI said one person died and that a dozen of its members were injured during clashes with police.
But Albania's interior minister and the police, who released footage of their operation, denied responsibility.
Media reports said that when police arrived at the camp hundreds of PMOI members tried to repel the officers. The group accused the police of using pepper spray, AFP reported.
Police did all they could to avoid causing "incidents" and no PMOI members were hurt by officers, Interior Minister Blendi Cuci told a press conference.
"In no case (was) the death of a person on Tuesday in the Mujahedin camp... caused by police forces", he said, adding that officers were awaiting a forensics report into the death of a man in his seventies.
"The Mujahedin violence towards the police is intolerable", he said.
Police said earlier they had launched a probe into the PMOI's allegations.
Local media reported that the police operation was part of an investigation into cybercrime and that officers seized computers.
Police said in a statement they had acted on the orders of the Albanian judiciary due to the "violation of agreements and commitments" made by the group "when they settled in Albania solely for humanitarian purposes".