Saturday's bombing, which Sunni hardliners blamed on Iran and the local Shia group Tehrik-i-Jafria Pakistan, raised fears of sectarian unrest just two weeks before elections on 3 February. Tehrik-i-Jafria condemned the blast.
Witnesses said activists of the Sunni Sipah-i-Sahaba Pakistan group attacked and burned the Iranian centre in a two-storey building in central Lahore, capital of Punjab province. There were no reports of casualties.
The Iranian embassy in Pakistan condemned the attack on the Lahore centre as "terrorism" and asked Pakistani authorities to arrest those who carried it out, Iranian radio said.
Thousands of people watched the body of the Sunni leader, Zia-ur-Rahman Faruqi, being taken through Lahore. He was later buried in the central Punjab town of Jhang.
Mr Faruqi was killed in a bomb blast outside the Sessions Court in Lahore on Saturday, shortly before he and his deputy, Azam Tariq, were due to appear on charges of involvement in the sectarian murders of a score of Shias.
Police said the bomb death toll was 26, including 19 policemen, while 25 of about 90 wounded remained in critical condition.
The remote-control bomb, apparently left on a motorcycle, went off shortly after noon as Mr Faruqi and Mr Tariq arrived at the court.
President Farooq Leghari condemned the bombing as "a dastardly act of terrorism".
No group has claimed responsibility. The attack appeared to be the latest in a long-running feud between militants in Pakistan's majority Sunni and minority Shia communities, which cost about 170 lives last year. Shias form about 15 per cent of Pakistan's population of over 130 million, but are a majority in neighbouring Iran.
The secretary of Iran's National Security Council, Hassan Rowhani, urged Islamabad last week to crack down on what he called terrorist groups and prevent killings of Shias. The Sipah-i-Sahaba called the Iranian statement an interference in Pakistan's internal affairs.
Newspapers yesterday quoted a spokesman from the Sunni group as saying that Iran was providing Shia groups with guns and money. "We have been warning the government about Iranian backing for the Pakistani Shia community," he said.