Addressing an ICT conference here, Rouhani said Iran ought to see the online world as an opportunity, and not something to be feared, according to the Islamic Republic News Agency.
"The right of citizens to have access to international networks of information is something we formally recognize," Rouhani was quoted as saying. "Why are we so nervous? Why don’t we trust our youth?"
"Every minute we witness 1.3 million 'likes' on Facebook, every minute 70 hours of film are uploaded on to YouTube -- that means a great change is taking place in today's world," Rouhani said. "The impact of this virtual world on the society, country and even on people’s lifestyles is absolutely real."
In his speech Rouhani likened Iran's approach to the internet to the country's past policy of banning video cameras, enforced throughout much of the 1980s and early 1990s, and the current prohibition of satellite dishes.
He said neither of these policies were or are effective and the presence of this technology had not made "faith and identity disappear".
Proponents of internet restrictions shouldn’t try to fight advances in digital technology using "wooden sticks", he said, urging them to instead develop "modern tools" and become actively involved in the Web.
Rouhani also said Iran had to improve its access to high-speed broadband Internet and said that the Communications Ministry would prioritize the development of third- and fourth-generation networks.
The president urged the need to rely on domestic technologies both in terms of software and hardware. He called on the Iranians not to restrain themselves to imported technologies.
Rouhani hailed the progress Iran has made in the field of information technology and called for the advancements of the "electronic government" plan.  
Pointing to the speedy growth of communication technologies, he noted that a new global family is taking shape where the users of cyber space are the family members.
The president termed the growth ad of communication technologies as surprising.
Rouhani said the impact of cyber technology is quite tangible in everyday life of the ordinary people.
"Cyber technology opens new opportunities for societies and can be used as a tool to preserve and spread the Iranian Islamic culture," he said.
President Rouhani said he was dissatisfied with the current speed of the Internet services available in the country.
"It’s a citizenship right of every Iranian to connect to the global Internet link immediately without wasting time," he added.
The president said Internet services and its immediate availability will help the youth achieve the goals of the resistance economy.
Referring to the significant role of information and communications technology in the world today, President Rouhani said Iran enjoyed huge potentials in the field of ICT.
Supplying 4,100 villages across the country with high speed internet as well as increasing the capacity of Tehran-Isfahan optical fiber connection to 400 Gigabit per second, were among the national projects inaugurated in the event.
There are some 45 million internet users in Iran. The Islamic Republic is seen as the leading country in the Middle East region in terms of Internet penetration. It has already been awarded the UNESCO special certificate for providing telecommunication services to rural areas.
The Iranian government has launched a massive project to set up a national information network in the country. Iranian authorities say the project will improve internet access and protect the country from cyber attack.