There's a three way struggle for power in Iran. One faction, led by president Mahmoud Ahmadinejad, commands the allegiance of religious conservatives who seek clean government (free of the corrupt clerics, and their cronies, who now dominate). Loosely allied with Ahmadinejad is supreme (religious) leader Ayatollah Ali Khamenei, who, technically, has the final word on all political decisions. But Khamenei commands a force of followers largely composed of thieves (corrupt clerics and officials). These are the people Ahmadinejad has always pledged to purge from public life, but the thieves are too powerful, and too determined to hold onto their loot, to be dislodged. Ahmadinejad is also more of a fanatic than the clerics who are in charge. Finally, there is Hossein Mousavi, who lost the recent presidential election because of fraud by the hardliners. He represents most Iranians looking for a change. By most counts, this is a majority of the population. But within this group, there is no agreement on exactly what changes should be made. Meanwhile, Ahmadinejad and Khamenei wage a war of words and conflicting orders. The clerical mafia that, for so long, ran the country, is now split, publically, for the first time. Senior clerics are openly arguing, and the leaders of the military and the Revolutionary Guard (the religious army formed to watch the regular army and police) are split as well.
Ahmadinejad has been forced fire most of his 21 government ministers, and appoint new ones more satisfactory to Khamenei. All this pushing and shoving between Ahmadinejad and Khamenei only makes the reformers stronger, and bolder.
The government is rushing to implement new Internet regulations, which make it more difficult be anonymous on the net (by requiring all ISPs to save copies of all data they receive or transmit, for three months). The law is aimed at criminals and pornographers, but also makes it easier to identify and round up government opponents.
Although some 2,500 demonstrators have been arrested, all but a few hundred have been released. The police try to determine which of those arrested are opposition leaders, and these stay in jail.
July 22, 2009: The U.S. calculates that Iran will run out of locally mined supplied of uranium by next year, and will have to import uranium in order to continue its nuclear weapons program. The U.S. is planning to block such imports. Israel is still planning on bombing Iranian nuclear weapons facilities, but has apparently delayed this to see if a more moderate Iranian government might emerge from the current tumult.
July 21, 2009: Large protests continue in the capital. Apparently the government cannot agree to use more force to halt these, or fears triggering wider unrest if they do crack down hard.
July 20, 2009: In Germany, the prosecution of those smuggling forbidden materials and industrial goods to Iran has caused a German intelligence report, on the Iranian nuclear weapons program, to be revealed. The report makes a compelling case that the Iranians are developing nuclear weapons (if only to account for some of the gear they are secretly smuggling in from the West.) American intelligence had issued a report two years ago concluding that Iran had stopped developing nuclear weapons in 2003. Many were mystified at this report, which contradicted so much other evidence to the contrary.
July 19, 2009: The British embassy employee (an Iranian) accused of organizing anti-government violence (as a way to try and blame the unrest on "foreign interference") was released from prison. But the government still threatens to prosecute and hold a show trial.
July 18, 2009: Large scale demonstrations have again taken place in the capital. The police used non-lethal weapons to drive back the demonstrators.