Yes, you do (or at least, you did when we did it in 2006, it may have changed since). At that time we also needed to do so for Serbia and Bulgaria, but I think they are now covered by the EU Green Card system.
I believe you still need an invite in order to enter Iran, so it may be possible for the person who is inviting you to arrange insurance on your behalf - that's what we did.
You will need a "carnet de passage" for the vehicle, which is basically an insurance to ensure you will take the vehicle out of the country with you. You'll also need all the paperwork for the vehicle to show at various borders (colour photocopies of the registration documents are good, to reduce the risk...). I'm hoping you've already got a carnet as I doubt you can get it in Turkey!