The towns of Sarpol Zahab and Qasr-e Shirin in the country's western Kermanshah province were among the worst hit.
These Kurdish areas are already some of the poorest in the country.
In the town of Sarpol Zahab, home to about 35,000 people, at least 236 were killed and as many as half the buildings there have been destroyed.
Reza Mohammadi and his family fled their home when they felt the first tremors.
“I tried to get back to pick some stuff, but it totally collapsed in the second wave,” he told AP.
Many buildings in Sarpol Zahab were constructed as part of government low-income housing projects under former President Mahmoud Ahmadinejad, known as Mehr. They have been criticized for the low quality of the construction.
Reports on social media indicate medical facilities were heavily damaged and doctors were performing surgery by the feeble light of cell phones as power had not yet been restored.
Iranian media reported that a woman and child were pulled out of the rubble, still alive.
Officials have said that access to the rural areas is limited.
Landslides triggered by the quake have blocked roads and hampered rescue efforts. All roads have now been opened, Tasnim News reported citing the provincial police chief.
Multiple aftershocks have further frightened people who slept outdoors Sunday night and many planned to spend a second cold night sleeping outside on Monday.
“It is total chaos here, most homes were destroyed in Kermanshah and people are stuck under bricks and debris after the earthquake,” Red Crescent Society volunteer Ali Sadeghi told Al Jazeera.
He said they have been pulling bodies out of the wreckage since last night, but rescue efforts are slow and difficult.
The Iranian army has been tasked with leading rescue and aid operations in urban areas, including Sarpol Zahab, and the Revolutionary Guards (IRGC) have been assigned to rural areas. IRGC commander Major-General Mohammad-Ali Jafari traveled to Kermanshah province on Monday.
In a televised interview, Jafari estimated rescue operations would be completed by the end of Monday.
“People’s immediate needs are firstly tents, water, and food,” he said, explaining that newly-constructed buildings suffered little damage, “but the old houses built with earth were totally destroyed.”
The province of Kermanshah has declared three days of mourning. Iran has declared a day of national mourning.
