The current flag of Iran is adopted in 1980 and is a reflection of the changes brought about by the Iranian Revolution. The emblem in the center of the flag is a highly stylized composite of various elements representing different facets of Islamic life: Allah, the Book, the Sword, the five principles of Islam, balance, unity, neutrality, and the universal government of the downtrodden. The coat of arms of Iran has been placed in the center of the white band which is meant to have multiple meanings, but is essentially a geometrically-symmetric form of the word Allah as well as overlapping parts of the Islamic phrase "la ilaha illa Allah" ("There is no god but Allah"). The symbol consists of four crescents and a sword. The four crescents form the word Allah: from right to left the first crescent is the letter "Aleph", the second one is the letter "Laam", the sword (straight line) is the second "Laam", and the third and forth crescents together form the letter "Heh". Above the sword (central part) is a tashdid (a diacritical mark for gemination resembling a letter W).
The sword represents a powerful and sovereign state. The shape of the emblem is chosen to remind people of a red tulip for the memory of the (young) people who died for Iran, building on a legendary belief that red tulips grow on the blood of martyrs, valuing patriotism and self-sacrifice. The symbol was designed by Hamid Nadimi, and was officially approved by Ayatollah Khomeini.source: wikipedia