DUBAI (Reuters) - Iran on Sunday accused Saudi Arabia of backing terrorism after a senior Saudi prince, a former intelligence chief, addressed a Paris rally held by exiled Iranian rebels and told them he wanted the Iranian government to fall.

Shi'ite Muslim power Iran and Saudi Arabia, bastion of Sunni Islam, are longstanding religious and political arch rivals. Relations are fraught as they back each other's foes in regional wars such as in Yemen, Iraq and Syria.

"The Saudis are resorting to well-known terrorists ... as they have also done in Iraq, Yemen and Syria. This shows that they use terrorism and terrorists to further their aims against regional Islamic countries," an unnamed Iranian Foreign Ministry source was quoted by Iran's state news agency IRNA as saying.

The rally addressed by Prince Turki al-Faisal on Saturday was held by the political wing of the exiled People's Mujahideen Organisation of Iran (PMOI), which seeks the overthrow of Iran's clerical leadership established by the 1979 Islamic revolution.

Saudi media gave top coverage to the speech. The rally was also attended by a number of Western political figures, including former U.S. House of Representatives speaker Newt Gingrich.

Also known by its Persian name Mujahideen-e-Khalq Organisation (MKO), the group sided with Saddam Hussein during Iraq's war with Iran in the 1980s but fell out of favor with Baghdad after he was toppled by a U.S.-led invasion in 2003.

PMOI once had a presence in the United States and maintains offices in Europe. Critics have described it as a cult.

Iran accuses Saudi Arabia of supporting Islamic State and other militant groups, which Riyadh denies. The Saudis say Iran is fomenting sectarian violence in the Middle East and has aspirations to dominate the region.

"Your legitimate struggle against the (Iranian) regime will achieve its goal, sooner or later," Prince Turki, also an ex-ambassador to Washington and London, had said in his speech.

"I, too, want the fall of the regime," he added.

(Reporting by Dubai newsroom; Editing by Raissa Kasolowsky)