Modern fantasy's first and most important debt to PL is Zoroaster's cosmological dualism, which would be taken over by Jews in a weaker, monotheistic, version (> Jewish Religious Literature); both forms of this dualism underlie most mythopoeic fantasy. The syncretistic religion founded by Mani (216-276) had a strikingly dramatic dualist account of cosmology, accessibly presented by Jes P Asmussen in Manichaean Literature (anth 1975). Another important aspect of Persian literature from an early date is its role in transmitting stories between East and West. To approach one such case, see Ramsay Wood's Kalila and Dimna (1980).
The closest analogue to fantasy in classical Persian literature is the elaborate mysticism prominent in Sufi writing, although Westerners rarely find that the poetry this led to reads like fantasy. The numerous classical works which do so read include: Manteq at-Tair (1177; trans Afkham Darbandi and Dick Davis as The Conference of the Birds 1984), by Farid ud-Din Abu-Hamid Muhammad 'Attar (circa 1130-circa 1220), whose plot John Crowley borrowed in Little, Big (1981); the Persian national epic, Shah-nama (1010; much cut trans Reuben Levy as The Epic of the Kings 1967) by Ferdowsi or Firdausi (circa 935-circa 1020); and Haft Paykar (1197; trans Julie Scott Meisami 1995) by Abu Muhammad Ilyas ibn Yusuf ibn Zaki Mu'ayyad (circa 1141-circa 1209) writing as Nizami Ganjavi, a story from which became the plot of the various Turandot Operas.
In this century, Iranian modernists have on occasion adopted tools reminiscent of fantasy or Fabulation. Such novels include Buf-i Kur (1937; trans D P Costello as The Blind Owl 1957) by Sadegh Hedayat (1903-1951) and Sang-e Sabur (trans Mohammed R Ghanoonparvar as The Patient Stone 1979; rev 1989) by Sadeq Chubak (1918- ). Iranian drama has been much influenced by Absurdist and similar models, as in Seh nemayeshname-ye 'arusaki (1963; trans Gisele Kapuscinski as "Three Puppet Shows" in Modern Persian Drama anth 1987) by Bahram Beyza'i (1938- ). Other writers have begun using the tools of Magic Realism; an example is "Sara" (1974; trans Farzin Yazdanfar in A Walnut Sapling on Masih's Grave anth 1993 ed John Green and Yazdanfar) by Sharnush Parsipur (1946- ).
As for works closer to the Western fantasy genre, these do exist, but it has not proven possible to learn much about them. Massoud Khayyam, an aerospace engineer, has written Qafas-i shatranj ["The Chess Cage"], a "science-fiction fantasy". Meanwhile, although Arabic literature has historically included less of the fantastic, this has changed somewhat over the past three decades, and some of the contents of Flights of Fantasy (anth 1985) ed Ceza Kassem and Malak Hashem can be profitably read as genre fantasy. And – like many Arabic writers – influenced by Alf layla wa layla ["One Thousand and One Nights"] (> Arabian Fantasy), the Turkish writer Güneli Gün has written On the Road to Baghdad (1989). There is every reason to believe that further research into modern fantasy in Iran and elsewhere in the region will be productive.
A good starting point for consideration of Persian literature is Persian Literature (anth 1988) ed Ehsan Yarshater. [JB]