Hundreds of mourners assembled in the late afternoon on Thursday outside the village of Kuhestak in Sirik County, along a stretch of the coast of the Strait of Hormuz that was hit by heavy US air strikes late on Tuesday.
Mourners carried caskets wrapped in the Iranian flag as families, relatives, soldiers and others accompanied the coffins in the streets of the port town.
A US missile hit a home in the town where dozens were gathered to celebrate the wedding of a fisherman's daughter on Tuesday night, according to a rights group and Iranian media.
Iranian officials say four people died and nearly 70 were wounded by a strike that hit a home during a wedding.
State TV reported on Thursday that a fifth person, a 22-year-old woman, had since died in hospital.
The US military said it was aware of the Iranian reports but that it "never targets civilians".
US Vice President JD Vance said the United States was investigating the air strike.
"We're investigating it because obviously we care. We want to know," Vance told reporters during a White House press briefing on Thursday.
"If we do make mistakes, again, this is a big difference between us and Iran, when our military makes mistakes, they learn from them to try to get better from them," Vance added.
"This is the body of Martyr Amir-Mohammad Karimi, a four-year-old child who war martyred in an attack on the country's south by the criminal American regime," a reporter from the Mehr news agency said in footage filmed in front of a pick-up truck carrying a flag-draped coffin beneath a canopy of palm fronds.
In other footage of the funeral, mourners threw petals into the air as doleful music played from a loudspeaker.
A casket was carried past a row of soldiers standing at attention with rifles.
"If it was a military location, it wouldn't be so painful. This was a wedding ceremony but they turned people's joy into mourning," the Tasnim news agency quoted a local man as saying.
The US launched the air strikes on Tuesday, hitting what it said were military targets along the coast in retaliation for Iranian attacks on shipping in the Strait of Hormuz.
The sudden escalation of the Iran war has caused a surge in oil prices to the highest levels since July.
Prices rose for a fourth straight day on Thursday, taking Brent crude futures over $US96 a barrel.
Iran reported 18 dead in the last US assault, including the four killed at the wedding.
It responded on Wednesday to the strikes with attacks on US bases in Iraq, Jordan, Qatar, Kuwait and Bahrain, and carried out further attacks early on Thursday, saying it was targeting another US base, in Kuwait.
Kuwait's military said its air defences had intercepted missiles and drones.
But following that, the war's biggest flareup since July appeared to subside, with no more major attacks from either side reported as the day wore on.
with AP
