August 21,2008:  Iran continues to ignore threats of sanctions from the West, and keeps its nuclear power (and suspected nuclear weapons) program going. Iran is getting around the sanctions by increasingly going to China for materials, and access to financial services. Russia and China continue to run interference for Iran in the UN.

The national leadership appear to have no illusions about their military situation. The Iranian armed forces are organized and equipped mainly to keep the Iranian people in line. Sanctions have kept the military from upgrading their equipment much over the last three decades, meaning that the Iranians are not very well prepared to fight conventional wars with any of its neighbors. While the military tries to cover this up, by periodically announcing fictional new domestic weapons developments, this only helps with morale among government supporters inside Iran. But externally, some of Iran's neighbors use the Iranian fictions to get support for their own military buildups. But there is some reality in this, as the Gulf Arabs know that the Iranians have a long and formidable military reputation as fighters. This was why, in 1988, when Iran agreed to a ceasefire with Iraq (after a failed Iraqi invasion turned into an eight year war), the Arab world considered it a victory. So the Gulf Arabs buy billions (over a hundred billion) dollars worth of modern weapons, and hope the military sanctions on Iran persist. But that has not stopped Iran from attacking. They just do it via third parties. Iranian aid to groups like Hezbollah and Hamas are only the tip of the iceberg. Iran provides less publicized support for Shia radicals throughout the Persian Gulf, and even in Pakistan. This is not a decisive military weapon, but it does distract potential opponents, and makes the Iranian government appear as a "protector of oppressed Shia" everywhere. With nuclear weapons, Iran could make more compelling and convincing threats.

Over the last few months, several hundred pro-Iranian Iraqi Shia gunmen fled to Iran to escape Iraqi and American troops over the last few months. These Shia were key members of the Mahdi Army militia, and the Iranians are providing them more training. Apparently the Iranians are helping the Iraqis form death squads, so that they can return and kill key government officials. This can be a powerful weapon, that can change the minds of many surviving politicians and security officials. Muqtada al Sadr and his Mahdi Army have used assassination in the past, but stopped when the government, and other armed groups, threatened massive retaliation. But Hezbollah in Lebanon has demonstrated that expert death squads, that can cover their tracks well, can be very effective. Since this new Iranian ploy is no secret, Iraqi and American forces are working to seal the border, and build up an informant network in Shia communities. By making it difficult for the Shia killers to return, and operate inside Iraq, the impact of the death squads will be much less.

Revolutionary Guards continue fighting Kurdish separatists along the northern Iraq border. Captured Kurds are often executed, to encourage other Kurds to cool it. The Iranian government believes that they have a highly effective police state in place, and that if they keep using it to identify and neutralize (jail, kill or drive into exile) opposition leaders, they will prevent any meaningful threat from developing.

August 11, 2008: In the southwest, Sunni Baluchi separatists have killed two policemen and kidnapped three more. The Baluchi rebels persist largely because they can always find sanctuary just across the border in Pakistan, where most of the Baluchi tribes are.