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The capital of the Kerman province is the city of Kerman, located in a valley to the north of the mountains, at an altitude of 1,800 metres which gives it a relatively cool climate even in summer. The desert trading city of Kerman has long been a staging point for travelling between Persia and the Indian subcontinent and today it remains the best place from which to explore southeastern Iran. The city has a mud-brick core centred around the historic and very lively bazaar. This is surrounded by ever-expanding low-rise, blond-brick suburbs punctuated by qanat-fed parks.

Believed to have been founded in the early III century AD by Sassanian dynasty progenitor Ardashir I, Kerman has a history full of prosperity and plunder. After the Battle of Nahāvand in 642, the city came under Muslim rule. At first the city's isolation allowed Kharijites and Zoroastrians to thrive there, but the Kharijites were wiped out in 698, and the population was mostly Muslim by 725. Already in the eighth century the city was famous for its manufacture of cashmere wool shawls and other textiles. The Abbasid Caliphate's authority over the region was weak, and power passed in the tenth century to the Buyid dynasty, which maintained control even when the region and city fell to Mahmud of Ghazna in the late tenth century. The name Kerman was adopted at some point in the tenth century.

Under the rule of the Seljuk Turks in the 11th and 12th centuries, Kerman remained virtually independent, conquering Oman and Fars. When Marco Polo visited Kerman in 1271, it had become a major trade emporium linking the Persian Gulf with Khorasan and Central Asia. Subsequently, however, the city was sacked many times by various invaders. Kerman expanded rapidly during the Safavid Dynasty. Carpets and rugs were exported to England and Germany during this period.

In 1793 Lotf Ali Khan defeated the Qajars, and in 1794 he captured Kerman. But soon after he was besieged in Kerman for six months by Agha Mohammad Khan. When the city fell to Agha Mohammad Khan, angered by the popular support that Lotf Ali Khan had received, all the male inhabitants were killed or blinded, and a pile was made out of 20,000 detached eyeballs and poured in front of the victorious Agha Mohammad Khan. The women and children were sold into slavery, and in ninety days the city was destroyed.

The present city of Kerman was rebuilt in the 19th century to the northwest of the old city, but the city did not return to its former size until the 20th century.

Kerman's continuity was its commerce, the evidence of which can still be seen in the many caravanserais around the bazaar. As trade moved more to the sea in the XVI century, so Kerman relied more on the production of carpets, which remains important today.

The city is home to many historic mosques and Zoroastrian fire temples. Kerman is also a former capital of Iran, a position that it held during several periods.

The city is something of a melting pot blending Persians with the more subcontinental Baluchis who dominate areas east of here. This mix is most evident in the bazaar, which is a highlight. Sights in and around Kerman can keep you for two to four days.

Kermani carpets have been famous for centuries and are renowned for being very large, soft and with designs featuring flowers, nuts and fruit as well as portraits. The bazaar is the place to find them and also Kermani pate, a brightly coloured square of cloth with intricate embroidered designs.

Kerman is reasonably safe but the number of drug addicts makes it worth taking extra care at night.