Iran state news agency photoshops Michelle Obama's 'too revealing' Oscar dress

An Iranian news agency has digitally altered an image of US First Lady Michelle Obama announcing the Oscar in a bid to make her look more modest.

Michelle wore a sleeveless and low cut dress by Naeem Khan, as she announced the Oscar for Best Picture last night.

But Iran's Fars manipulated the photo to cover her chest and shoulders, Politico reports.

The photo manipulation was first reported by the blog Persian Letters.

It said that Fars, which is affiliated with the Islamic Revolutionary Guards Corps (IRGC), noted that it was unusual that Michelle had announced this year's award for Best Picture, which went to what it called the "controversial and anti-Iranian" film Argo.

The hard-line news agency also said the movie is a production of the Zionist Warner Bros. Entertainment company.