Power shifts behind the throne

A RIFT is emerging between President Mahmoud Ahmadinejad and Iran's supreme religious leader, suggesting that the president no longer enjoys Ayatollah Ali Khamenei's full backing.

The move will see Ahmadinejad's grip on power weakened ahead of parliamentary elections in March.

In the years after his election in 2005, criticism from political opponents was usually silenced by Khamenei, who has the final word on state matters and regularly endorsed the president in public speeches. But that support has been conspicuously absent in recent months.

There are numerous possible reasons for Ahmadinejad's loss of support, but diplomats and analysts in Iran all point to one overriding factor: the US. An American intelligence report last month said Iran had suspended its nuclear weapons programme in 2003 in response to international pressure. The report sharply reduced the threat of a military strike against Iran, allowing the Iranian authorities to focus on domestic issues, with important parliamentary elections looming in March.

"Now that Iran is not under the threat of a military attack, all contradictions within the establishment are surfacing," said Saeed Leylaz, an economic and political analyst. "The biggest mistake that Americans have constantly made toward Iran was adopting radical approaches which provided the ground for radicals in the country to take control."

Iran had been under increasing international pressure for its refusal to suspend its uranium enrichment programme, which can be pursued for either peaceful or military purposes. In separate speeches last year, American and French officials did not rule out a military attack on Iran if it continued its defiance.

While the pressure was on, Iranian leaders were reluctant to let any internal disagreements show. Senior officials, including Khamenei, constantly called for unity and warned that the enemy, a term commonly used to refer to the Untied States, could take advantage of such differences.

The Iranian presidency is a largely ceremonial post. But Ahmadinejad had used the office to espouse an economic populism that built a strong following among the country's middle and lower classes and made him a political force to be reckoned with. That popularity won him the strong backing of the supreme leader.

But the relationship began to sour, even before the US intelligence report was released. A source close to Khamenei said the ayatollah was especially disappointed with Ahmadinejad's economic performance, which has led to steep inflation in the cost of basic necessities, from food to rents to property values.

"Mr Khamenei supported Mr Ahmadinejad because he believed in his slogans of helping the poor," said the source. "But his economic performance has been disastrous. Their honeymoon is certainly over."

Economists have long criticised Ahmadinejad's economic policies, warning that his reliance on oil revenues to finance loans to the poor and to buy cheap imports would lead to inflation and cripple local industries. Inflation has increased to 19% currently from 12% in October 2006, according to figures released by the Iranian Central Bank.

Khamenei said earlier this month in a speech in the central city of Yazd that "the government has certain unique characteristics, but like any other government there are mistakes and shortcomings". He added that continuous criticism can undermine the government, but he refrained from praising it as he has in the past.

There have been other signs lately that Ahmadinejad is falling from favour. Recently the supreme leader appointed a hard-line military leader, Mohammad Zolghadr, as deputy head of the armed forces for Basij, a volunteer militia force. Ahmadinejad had dismissed Zolghadr last month as deputy interior minister for security affairs.

Ahmadinejad appeared angered by interference from Iran's former chief nuclear negotiator, Ali Larijani, who visited Egypt in his capacity as the leader's representative at the Supreme National Security Council. Ahmadinejad said that his government had a Foreign Ministry that determined the country's foreign policy, and a ministry spokesman said Larijani's trip was personal.

Larijani's trip was important because Tehran cut ties with Egypt, a predominantly Sunni country, when Cairo signed a peace agreement with Israel in 1979 and provided asylum for the deposed Shah of Iran. Larijani, who is a close aide to Khamenei, brushed off the remarks from the Foreign Ministry and announced that his talks with the Egyptian authorities had gone well.

In a further provocation, Larijani registered on Friday to run in the Islamic state's March parliamentary election. The vote will pit conservatives, who now dominate the assembly, against more moderate politicians seeking a comeback.

In the face of rising criticism, Ahmadinejad has for the first time admitted that Iran was suffering from rising prices. Previously he had called inflation a fiction invented by his political enemies. But he blamed the problem on former governments, parliament and what he called a 36% increase in the price of goods in international markets.

Mohammad Reza Katouzian, a conservative and one-time supporter of Ahmadinejad, said recently that the president "should offer solutions instead of explaining past mistakes".

Hassan Rassouli, head of Baran, a non-governmental organisation created by the previous reformist president Mohammad Khatami after he left office, said Ahmadinejad tried only to justify inflation, not to do anything about it.

"Either the president has no idea how inflation has affected people's lives or he prefers to talk unprofessionally without referring to figures," he said.

Relations between the US and Iran will always be difficult – as the encounter between Iranian speedboats and three US Navy warships in the Strait of Hormuz last Monday made clear – but perhaps not impossible, many here are saying.

Liberal commentators in Iran and abroad have long argued that hard-line policies in the West only strengthen hard-line politicians in Iran, and conversely that lowering the threat level enhances the position of moderates.

With conservative politicians who supported Ahmadinejad in 2005 increasingly turning into his fiercest critics, and with Khamenei saying recently that Iran's lack of contact with the US "does not mean that we will not have relations indefinitely", the pundits would seem, for now, to be on the right track.

Nuclear plea

Supreme leader Ayatollah Ali Khamenei said yesterday Iran's nuclear file should be handled by the International Atomic Energy Agency not the United Nations Security Council, which has imposed two rounds of sanctions on Tehran.

Khamenei, Iran's most powerful figure, also told visiting IAEA chief Mohamed ElBaradei that the United States "cannot bring the Iranian nation to its knees" with pressure over Tehran's nuclear programme.

Washington is pushing for a third round of sanctions on Iran for refusing to halt sensitive nuclear work, which the US fears will be used to build atomic bombs. Iran insists its aims are peaceful.

"Americans are mistaken by thinking that by pressuring Iran over the nuclear issue they can break Iran," Khamenei said.

"By bringing this and other issues to the fore, they cannot bring the Iranian nation to its knees."

He insisted Iran had no intention of building bombs. "The Islamic Republic of Iran has repeatedly said that building or using nuclear weapons is against sharia (Islamic law] ... Iran has always remained committed to the NPT (nuclear Non-Proliferation Treaty]," he said.