The National Post ran the piece on its front page Friday along with a large photo from 1944 that showed a Hungarian couple wearing the yellow stars that the Nazis forced Jews to sew to their clothing.
The story, which included tough anti-Iran comments, was picked up widely by Web sites and by other media.
"Is Iran turning into the new Nazi Germany? Share your opinion online," the paper asked readers Friday.
But the National Post, a longtime supporter of Israel and critic of Tehran, admitted Wednesday it had not checked the piece thoroughly enough before running it.
"It is now clear the story is not true," Douglas Kelly, the National Post's editor in chief, wrote in a long editorial on Page 2. "We apologize for the mistake and for the consternation it has caused not just National Post readers, but the broader public who read the story."
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