January 18, 2009: The December 27th Israeli attack on Hamas in Gaza, in an attempt to stop the rockets (including a growing number of longer range Iranian ones) has triggered a major confrontation between Iran and the Arab world. While Arab media supported Hamas, they also blamed Iran for supporting continued Hamas rocket attacks, even after a ceasefire was arranged (with the help of Arab diplomats) last year. In effect, the Israeli invasion has led to another round of angry rhetoric between Arab and Iranian media. Iran ended up calling the Arab nations complicit in the Israeli invasion. But neither Iran, nor any Arab nations, stepped up and actually sent military forces to aid Hamas. Some media in the Arab world pointed out the obvious, that the Moslem states in the region were weak, but making a lot of media noise to try and hide their shame. What the Arab media did not hide was their fear and loathing for Iran, depicting the Shia religious dictatorship as a threat to "true Islam." Overall, the battle between Hamas and Israel suits Iran, as it distracts Israel, who Iran sees as their major foe in the region. But there is concern about the growing public anger at Iran in the Arab world. Iran long depended on the Arabs being disunited. Now the Arabs are uniting in their fear of Iran, and buying a lot more weapons. The Arabs are even behaving with much less hostility to Israel. Iran tries to use that to make as much they can in their propaganda. But Arab fear of Iran is growing, while their fear of Israel has all but disappeared. Hamas, which Iran began supporting in 1990, and the Palestinian group is now seen, in the Arab world, as a wholly owned subsidiary of Iran.

The U.S. has fined Western banks billions of dollars for laundering Iranian cash, and abetting illegal Iranian imports for more than a decade. For the last six years, the U.S. has been systematically cutting Iran off from the international banking system. The current crackdown on major Western banks is just another part of this. As a result, Iran has been forced to engage in more illegal access to banking services. This puts Iran's money at risk, as funds can be seized when illegal transactions are detected. Iran has also used the banking system to support terrorist operations (currently for Hamas in Gaza, Hezbollah in Lebanon and several groups in places like Somalia, Iraq and Afghanistan), and this makes Iranian bankers even more vulnerable. The ten banks that the U.S. caught assisting illegal Iranian transactions are also turning over their records, which will reveal companies that were helping Iran violate international trade sanctions. This will lead to more fines, and more banks and companies in the West who are reluctant to deal with Iran. While Iran could then turn more to Russia and China, these two nations are also dependent on the international banking system, which the U.S. has by the throat (by virtue of being the largest economy on the planet.)

The Iranian Defense Minister went to Syria, to pressure the Hamas leadership-in-exile (who have veto power over the Hamas leaders in Gaza) to not accept any ceasefire deal with Israel. The Hamas leaders in Gaza want to cut a deal, because the Israeli ground invasion quickly revealed that Hamas fighters were no match for Israeli troops. The Israelis were much more aggressive than they were two years ago in southern Lebanon, and quickly killed any Hamas fighters they encountered, including a special unit of about a hundred fighters that had received combat training in Iran. As a result, most of the claimed 20,000 Hamas gunmen have deserted their units, leaving only some of the officers (5-10 percent of each unit) to carry on. By the second week of January, Israeli troops were mainly encountering Hamas officers in combat. This was very embarrassing for Iran, which had promised to turn Hamas into a crack fighting force. Back in Iran, this failure was blamed on the Arabs, who Iranians generally despise as lazy and stupid. In the Arab media, Iran is accused to sabotaging Hamas and causing the battlefield failures.

Currently, Iran's largest trade partners are the UAE (United Arab Emirates) with 25 percent, second place was Germany, with 9.7 percent and third was China. These three nations get most of the business because they are willing to look the other way as Iran arranges illegal goods (mainly weapons related items) to be smuggled in. The German government tries to crack down on this, but the UAE and China mainly look the other way. UAE has been a major trading partner with Iran for centuries.

There is growing anti-government activity by students, and a growing crackdown to try and contain the threat. Students are being arrested and prosecuted in public trails, while pro-government street gangs deliver unofficial punishment (beatings, and an occasional murder) to suspect students. Most Iranians hate their government, and the government has to be concerned that this hate might turn into open rebellion.

The fighting with separatist Kurds in the northwest, rebellious Baluchis in the south east, and growing numbers of drug smugglers in the east, continues. These low-level wars tend to produce several dozen casualties a week.

The government apparently allowed Osama bin Laden's eldest son (Saad), and heir apparent, to slip out of house arrest and travel to Pakistan. Iran has hosted many senior al Qaeda leaders since late 2001, but has kept most of them under some form of confinement. Al Qaeda preaches that Shia Moslems are heretics and should be killed. But Iran held its nose and supported al Qaeda because it was fighting the United States, and the West in general, which Iran sees as a good thing.

January 16, 2009: An Iranian court convicted four Iranians of plotting to overthrow the government (with U.S. support).   

January 4, 2009:  The first executions of the year occurred, as two drug smugglers were hanged. Last year there were 246 official executions, and several dozen unofficial murders or executions by local or national officials.

December 31, 2008: A daily newspaper was ordered shut down for saying that Iran has triggered the Israeli invasion of Gaza by urging Hamas to continue firing rockets into Israel.