Iran's conservative-dominated parliament adopted a bill Tuesday to allow abortions in limited cases, in a bid to stamp out a booming but dangerous backstreet business.

"Abortion will be allowed... within four months of gestation if the foetus is mentally or physically handicapped - inflicting a financial burden on the family - or the mother's life is in danger," according to the legislation.

The bill was passed despite opposition from right-to-life MPs but remains subject to approval by the Guardians Council, a hardline body that screens all legislation to ensure it is in line with Islamic law and the constitution.

"We do not intend to give permission to kill an innocent person, but the birth of certain deformed children inflicts huge costs on the country and causing psychological trauma to themselves and the families," Noureddin Pirmoazen from the parliamentary health commission said.

Iranian women wishing to terminate a pregnancy currently have just two options - prove that their life is at risk or join the tens of thousands who go through dangerous illegal abortions every year.

According to local press reports, at least 80,000 illegal abortions are carried out in Iran every year but some believe the actual figure could be far higher.

Under the law in place now, the mother and whoever carries out the abortion face a jail sentence of between three and 10 years and have to pay blood money (the judicial price of life) for the child.

The new bill stipulates that both parents must consent to the abortion and three doctors as well as the coroner's office must confirm the diagnosis. Any doctor performing the procedure will no longer face punishment in such cases.

It was adopted by 127 of the 217 deputies present but none of the 13 women MPs entered the debate which kicked off on Sunday.

Some pro-life MPs challenged the argument about the need to abort deformed foetuses or the financial burden inflicted on families and voiced concern about parliament's ability to set a timeframe for when a foetus develops a "soul."

"We must respect the right to live. There are many families who happily take care of their handicapped children," said Mahmood Madani.

"Financial burden does not apply to all. Well-off families can hire help to raise the handicapped," objected Mohammad Hossein Esteki.

"Just because an illegal act is frequently happening we cannot put a seal of approval on that," argued Abbas Ali Akhtari.

But Pirmoazen from the parliamentary health commission quoted fatwas or religious edicts by the Islamic republic's supreme leader and grand ayatollahs backing his views on the financial burden and the development of the soul.

"Ayatollah Makarem Shirazi puts the development of the soul at four months and 10 days when the foetus starts moving in the womb or the 20 weeks of pregnancy agreed among doctors," Pirmoazen said.

"The ban on abortion has not reduced its occurrence but it has increased maternal deaths due to illegal abortion," he said Sunday.