There are visible disagreements among the senior clergy that run the country. Meanwhile, the government still holds 300 demonstrators, and is trying to convict a hundred of them of crimes. The opposition claims that 69 people were killed by the violent government crackdown on the demonstrations (against Ahmadinejad stealing the vote.) The violence continues, with reports that seven lawyers, outside the capital, were murdered because they were representing demonstrators. The government is also trying a French language teacher and two Iranian employees of the British embassy on charges that they were helping organize the recent street demonstrations. The hard core clerics, who control the 125,000 man Revolutionary Guard, are increasingly eager to meet any public demonstrations against the government, with lots of violence. But the clerics who run the country are not stupid, and recognize that opposition to their religious dictatorship is growing, and becoming more willing to fight back.
All indications are that Iran has put aside plans to support an armed insurrection by pro-Iran Shia Iraqis inside Iraq. Instead, Iran is putting more effort, influence, intimidation and cash into persuading voters to elect a more pro-Iranian government. This is a nightmare scenario for Sunni Arabs in the Persian Gulf (especially Saudi Arabia). But to hard line Iranian clerics, it's a step back from the initial goal of installing an Iraqi government that was basically a puppet of Iran.
August 11, 2009: Inflation has declined to 21.5 percent a year, from a high of 29 percent last September. High inflation and high unemployment have been major causes of popular unrests, and still are.
August 3, 2009: Iran's supreme leader, Ayatollah Ali Khamenei, officially endorsed the second term of Mahmoud Ahmadinejad, but was visibly cool to Ahmadinejad. This included a visible refusal allow Ahmadinejad kiss his hand, as had occurred four years ago during a similar ceremony at the start of Ahmadinejad's first term. Khamenei and Ahmadinejad are now, quite openly, political enemies. While both are religious and social conservatives, Khamenei is corrupt and inefficient ruler, while Ahmadinejad shares neither of those traits. Both men have lots of followers, but Khamenei controls, for now, the military and police.
July 31, 2009: In northern Iraq, three American tourists out on a hike in a popular national park, crossed into Iraq and were arrested. The Iranians promptly accused them of being spies. Secret negotiations were soon underway to see how much could be extracted from the U.S. government in return for the release of the three tourists.
July 29, 2009: Responding to credible complaints of prisoner mistreatment, the government has released 140 demonstrators from prison. The government is getting a lot of bad publicity because of the harsh treatment it has unleashed on those demonstrating against the reelection of Mahmoud Ahmadinejad as president.