"The situation in the country is such that constructive criticism is not accepted," Rafsanjani told students in the northern city of Mashhad on Sunday, the ILNA news agency reported.
He called on Iran's political groups to work together to "create a climate of freedom which will convince the majority of people and erase ambiguities".
Rafsanjani was speaking a day before the annual Student Day, when demonstrations against the rule of Mahmoud Ahmadinejad, the Iranian president, are expected to go ahead.
Several websites have urged people to gather on Student Day near Tehran University campus.
"Those who demonstrate or protest must express themselves through legal means. Leaders must also respect the law," Rafsanjani said.
"There have always been extremist factions and excessive attitudes on both sides ... several problems will be solved if we adopt the path of moderation."
Iranian authorities have ordered journalists working for foreign media organisations not to leave their offices to cover the protests that are expected to take place on Monday.
"All permits issued for foreign media to cover news in Tehran have been revoked from December 7 to December 9," the culture ministry's foreign press department said in an mobile phone text message sent to journalists on Saturday.
Police and Iran's Revolutionary Guards have said that they will move against any "illegal" rally that takes place in Tehran.
"Any illegal gathering outside universities will be strongly confronted," Esmail Ahmadi-Moqaddam, a police chief, was quoted by Etemad newspaper as saying.
Residents of Tehran said that internet access, including access to email and websites loyal to the political opposition, had been limited in the run-up to Student Day.
Hundreds of thousands of people demonstrated in June in the immediate wake of Ahmadinejad's re-election, claiming that the Iranian authorities had rigged the vote.
Hundreds of people were detained by authorities and dozens were killed in clashes with police and pro-government militia.
Mirhossein Mousavi and Mehdi Karoubi, who were defeated in the presidential election, have not announced whether they will join the planned Student Day protests, as they have done in the past.