Iranian President Mahmoud Ahmadinejad has made this threat more tangible by repeatedly questioning Israel's right to exist, most recently on Monday, when he said Israel was a "fake regime" that "cannot logically continue to live."

Later Tuesday, Israel planned to launch from Siberia its Eros B satellite, designed to spot images on the ground as small as 70 centimetres, the defence official said. That level of resolution would allow Israel to gather information on Iran's nuclear program and its long-range missiles, which are capable of striking Israel, he said.

"The most important thing in a satellite is its ability to photograph and its resolution," he said, speaking on condition of anonymity because of the sensitive subject matter.

"This satellite has very high resolution, and (state-run) Israel Aircraft Industries has a great ability to process information that is relayed."

If the launch is successful, it will take seven to 10 days to see whether the images that are transmitted are sharp and clear, he said.

Tehran has helped to finance Palestinian militant groups as part of its campaign against the Jewish state, and appears to have stepped up funding since the Hamas militant group swept Palestinian elections in January.

At the inauguration of an Iranian studies department at Tel Aviv University, Mofaz said Iran had sent $10 million to militant groups in the first four months of the year.

"The money transferred by Iran serves as fuel for the terror groups," The Jerusalem Post quoted Mofaz as saying.

"Hamas' rise to power, coupled with Iran's efforts to obtain nuclear weapons, demonstrates the growing motivation to perpetrate anti-Israel terror attacks."

He did not say how the money was funnelled to the militants.

Iran has pledged to give the cash-strapped Hamas government money, but it has yet to deliver on its promise. Israeli experts have said that in the past, Iran had primarily funded other Palestinian militant groups, to the tune of about $10 million a year.

Iran's threatening comments about Israel had special resonance on Tuesday, which Israel marked as Holocaust remembrance day. Israeli Nobel peace laureate Shimon Peres, in Poland for Holocaust observances, drew a parallel between Ahmadinejad and Adolf Hitler.

"We will haven't recovered from this (the Holocaust) and I still hear these calls from Iran to destroy Israel," Peres said.

Ahmadinejad's words, he added, "are enough to put us all on alert."

Levey is in charge of financial aspects of the administration's war on terror, mainly blocking financial channels of international terror and imposing economic sanctions on rogue states. He previously served as anti-terror coordinator in the Justice Department.

Levey will meet senior officials in the Foreign Ministry, National Security Council, the Mossad and probably with Foreign Minister Tzipi Livni as well.

Livni met Spanish Foreign Minister Miguel Moratinos on Tuesday and told him that as long as Hamas was running the Palestinian Authority, the international community should present a united front against it.

She cautioned that Hamas leaders would make seemingly moderate statements to obtain legitimacy and financing.

He also said flatly that Iran would not abide by the Friday deadline to suspend uranium enrichment.

"If you take the first step wrong, the wrong trend will continue. We welcome any logical proposal to resolve the issue. They just need to say why should we suspend," Larijani said.

Iran's former President, Hashemi Rafsanjani, speaking at the same conference, claimed that Iran openly launched its nuclear program - which it insists is for peaceful energy purposes only - "but the behavior of Western countries forced it to carry out its nuclear program independently, based on local expertise and knowledge without relying on Western countries."

The International Atomic Energy Agency's chief spokesman, Marc Vidricaire, said Tuesday it would not comment on Iran's threat to scuttle all cooperation if sanctions are imposed. He said the IAEA planned no public statements ahead of agency head Mohamed ElBaradei's report to the Security Council and the agency's 35-nation board of governors, expected by the end of this week.

The United States, Britain and France maintain that Iran actually wants enriched uranium for atomic bombs, which would violate its commitments under the treaty. Iran denies the charge, but Washington is pressing fellow members of the Security Council to impose economic sanctions.

Meanwhile, an Israeli defense official said Israel was launching a satellite to spy on Iran's program, as Iran's leader persisted with his calls for the Jewish state's destruction.

Israel planned to launch from Siberia later Tuesday its Eros B satellite, designed to spot images on the ground as small as 27 inches, the defense official said. That level of resolution would allow Israel to gather information on Iran's nuclear program and its long-range missiles, which are capable of striking Israel, he said, speaking on condition of anonymity because of the sensitive subject matter.

On Monday, President Mahmoud Ahmadinejad called Israel a "fake regime" that "cannot logically continue to live." Last year, he called the Nazi Holocaust a "myth" and declared that Israel should be "wiped off the map."

Ahmadinejad's government insists the nonproliferation treaty gives Iran the right to enrich uranium for fueling civilian nuclear power plants, and he has given no ground in the international faceoff. The fiery hardline president said Monday he was reconsidering Iran's adherence to the treaty, which is aimed at stopping the spread of atomic weapons while allowing peaceful uses of nuclear energy.

"What has more than 30 years of membership in the agency given us?" he asked at a news conference, only the second since he took office last year at which foreign journalists have been allowed to ask questions.

As a member of the IAEA, Iran is obliged to honor the agency's basic nuclear safeguards agreement. However, that agreement is limited to select declared atomic facilities and programs.

It is not the first time Iran has threatened to curb cooperation: Several months ago, Tehran announced it would not honor the U.N. nuclear watchdog's so-called "additional protocol," which gave the IAEA increased and more thorough inspection powers.

Suspicions about Iran's intentions have grown since it was discovered in 2002 that Tehran had for two decades secretly operated large-scale nuclear activities that could be used in weapons making.

The IAEA says it has since found no direct evidence of an arms program, but it also says the Iranians have not been fully forthcoming in answering questions about their nuclear activities. After repeated attempts to resolve the issue through negotiations, the IAEA reported Iran to the Security Council for noncompliance.

Iran deepened international concerns by announcing April 11 that it had for the first time enriched uranium with 164 centrifuges - a step toward large-scale production of nuclear fuel.

The United States and others are urging the Security Council to take a tougher stance by imposing a mandatory order for Iran to halt enrichment, a move that would raise the threat of sanctions.

Russian and China, which are among the five permanent members that can veto council actions, have opposed that approach, saying diplomacy has not run its course. Ahmadinejad appears to be banking on their support to dissuade Washington from pressing a sanctions vote.

Rice's comments came after Iranian President Mahmoud Ahmadinejad said Monday that his nation would not comply with a UN Security Council demand to freeze uranium enrichment by the end of this week.

And earlier Tuesday, top nuclear negotiator Ali Larijani said that Iran will suspend its relations with the UN's atomic watchdog if sanctions are imposed.

"If you decide to use sanctions against us, our relations with the agency will be suspended," Larijani said of the
International Atomic Energy Agency (IAEA).

In Athens, Rice countered that "the Iranians can threaten, but they are deepening their own isolation."

"I would just say that when the international community speaks, and says that a member state must do something, then the international community has to be credible about that demand," she said.

"We will return to the UN Security Council after the report of the IAEA. ... We will consider what measures to take next, but we can't have another presidential statement, particularly in the light of Iran's continued defiance of international norm."

She was apparently referring a March 29 Security Council document giving Iran a month to completely halt its uranium enrichment activities.

As talks between Bakoyannis and Rice were under way, police stationed around 300 metres (yards) from the foreign ministry used tear gas to disperse a left-wing demonstration of about 400 people who were attempting to break through en route to the US embassy.

A larger communist demonstration of a few thousand decided against forcing the police cordon, and turned back.

The marchers held banners proclaiming support for the Iraqi resistance forces and opposition to military intervention in Iran.

"Wanted for killing millions of people," read a banner with Rice's picture, while another played on the secretary of state's surname, replacing Rice with 'Reich' in a reference to the Nazi German regime during World War II.

Some of the scattered protesters later caused damage at shops and cars in the area, Net state television reported.

A total of around 5,000 police officers were deployed around town to regulate traffic and guard approaches to the Greek parliament, the prime minister's residence, the foreign ministry and the US embassy.

During Rice's presence in the area, police helicopters flew overhead, and even pedestrians were prevented from nearing within a block of government buildings.

After talks with Greek Prime Minister Costas Karamanlis, the secretary of state is expected to spend an hour at the US embassy before departing for Ankara at 14:45 pm (1145 GMT).

Rice's visit to Athens is the first by a US secretary of state for bilateral talks since 1986, when George Schultz held the post under the Reagan administration.

During the Clinton administration, Warren Christopher visited Athens for a NATO meeting.

But Rice's immediate predecessor Colin Powell cancelled planned visits to the Greek capital on three occasions in 2004 and 2003.

"The developed nations are the biggest beneficiary of the added value of oil products," he said.

The president, who is embroiled with the West and the
United Nations over Tehran's nuclear program, stopped short of saying Iran would use oil as a weapon, a tactic much feared by his antagonists on the nuclear issue. Nor did he say what oil prices should be.

Oil prices leapt above $72 a barrel Wednesday, settling at a record high for the third straight day.

"The products derived from crude oil cost over 10 times the price of oil sold by producing states. Developed and powerful countries benefit more from its value-added than any party," Ahmadinejad said.

Oil prices should be determined on the basis of market supply and demand, the Iranian leader said.

"Oil is the major asset of nations possessing it. Its price should not be lowered on the pretext that it will prove harmful to developing states, thus permitting the world powers to benefit the most from it," he said.

George Orwel, an analyst at the New York-based Petroleum Intelligence Weekly said he thought Ahmadinejad was playing the oil card to resist pressure over Iran's nuclear program.

"They are using the oil as a political football. Every time there's an issue with Iran, the oil market freaks out," he said in a telephone interview.

Earlier this week, as oil prices pushed above $70 a barrel, ABN Amro broker Lee Fader said the trigger was heightened fear about U.S. military action against Iran, which has said it would go ahead with plans to enrich uranium in defiance of the United States, Europe and the U.N. nuclear agency.

Iran says its nuclear ambitions are peaceful, but the West fears it is intent on arming itself with nuclear weapons.

If the United States were to attack Iran, Tehran might try to cripple the world economy by putting a stranglehold on the oil that moves through the Strait of Hormuz - a narrow, strategically important waterway running to Iran's south.

While discounting Ahmadinejad's seriousness in his Wednesday comments about the value of oil, Orwel conceded the oil industry could not do without the 2.5 million barrels that Iran exports daily.

"Ahmadinejad is trying to show his muscle so that the Bush administration can realize the consequences on the oil market of further confrontation with Iran," Orwel said, adding that he fully expected Iran to threaten to cut off oil if the confrontation with the West continued.

While Ahmadinejad did not say he would use oil as a weapon in his dispute with the West, Interior Minister Mostafa Pourmohammadi said last month the oil card was in play.

"If (they) politicize our nuclear case, we will use any means. We are rich in energy resources. We have control over the biggest and the most sensitive energy route of the world," he said, referring to the Straits of Hormuz.

In keeping with Iranian leaders' tendency of late to contradict themselves, Foreign Minister Manouchehr Mottaki later denied Iran would adopt such a policy.

Iran is the world's fourth-largest oil-producing country and the second in
OPEC.

Ahmadinejad urged oil-producing countries - within and outside the Organization of Petroleum Exporting Countries - to establish a fund to help alleviate the pressure resulting from high oil prices on Third World nations.

Oppenheimer & Co. oil analyst Fadel Gheit said he considered it unlikely that Iran had any intention of cutting off its oil, the lifeline of its economy.

Gheit noted, however, that there was some truth in Ahmadinejad's comment on developed countries benefiting most from increased oil prices, though the statement would likely be seen as an attempt at "fanning the flames" of a red-hot oil market.

"What he's saying makes a lot of sense. Unfortunately, the source of the comment is going to send jitters in the market," Gheit said.

"The street value (of oil) is triple what OPEC is making," Gheit added, referring to the value of a barrel of gasoline versus the value of a barrel of oil.

Gheit estimated that in London, where the retail price of gasoline is about $6 a gallon, about $150 worth of gasoline can be made and sold from every $50 barrel of oil.

"That is why Exxon Mobil and all the rest make so much money," he said.

Bush has called news reports of plans to attack Iran "wild speculation" and declared that the United States is on a "diplomatic" track. But asked this week if his options included planning for a nuclear strike, he repeated that "all options are on the table".

The president is acting as if the decisions that may get Americans into another war are his to make and his alone. So the Iran crisis poses not only questions of military feasibility and political wisdom but of constitutional usurpation. Bush's top officials openly assert that he can do anything he wants - including attacking another country - on his authority as commander-in-chief.

Last October, Secretary of State Condoleezza Rice was asked by members of the Senate Foreign Relations Committee whether the president would circumvent congressional authorization if the White House chose military action against Iran or Syria. She answered, "I will not say anything that constrains his authority as commander-in-chief."

When pressed by Senator Paul Sarbanes about whether the administration can exercise a military option without an authorization from Congress, Rice replied, "The president never takes any option off the table, and he shouldn't."

The founding fathers of the United States were deeply concerned that the president's power to make war might become a vehicle for tyranny. So they crafted a constitution that included checks and balances on presidential power, among them an independent congress and judiciary, an executive power subject to laws written by Congress and interpreted by the courts, and an executive power to repel attacks but not to declare or finance war.

But the Bush doctrine of preemptive war, as laid out in the 2002 National Security Strategy of the United States and reiterated this year, claims for the president the power to attack other countries simply because he asserts they pose a threat. It thereby removes the decision of war and peace from Congress and gives it to the president. It is, as Senator Robert Byrd put it, "unconstitutional on its face".

Congressional response

DeFazio is now preparing and seeking support from other House members for a resolution asserting that the president cannot initiate military action against Iran without congressional authorization.

"The imperial powers claimed by this administration are breathtaking in their scope. Unfortunately, too many of my colleagues were willing to cede our constitutional authorities to the president prior to the war in Iraq. We've seen how that turned out," DeFazio told the New York-based Nation newsmagazine. "Congress can't make the same mistake with respect to Iran. Yet the constant drumbeat we're hearing out of the administration, in the press and from think-tanks on Iran eerily echoes what we heard about Iraq.

"It likely won't be long until we hear from the president that he can take preemptive military action against Iran without congressional authorization, which is what he originally argued about Iraq. Or that Congress has already approved action against Iran via some prior vote, which he also argued about Iraq," DeFazio said. "That is why it is so important to put the administration, my colleagues and the American people on notice now that such arguments about unilateral presidential war powers have no merit. Our nation's founders were clear on this issue. There is no ambiguity."

There is considerable evidence that military action against Iran has already begun. Retired air force Colonel Sam Gardiner told the Cable News Network that "the decision has been made and military operations are under way". He said the Iranian ambassador to the International Atomic Energy Agency recently told him that the Iranians have captured dissident units "and they've confessed to working with the Americans".

Journalist Seymour Hersh wrote in The New Yorker that "American combat troops are now operating in Iran". He quoted a government consultant who told him that the units were not only identifying targets but "studying the terrain, giving away walking-around money to ethnic tribes and recruiting scouts from local tribes and shepherds".

Congressman Dennis Kucinich of Ohio has written to Bush, noting, "The presence of US troops in Iran constitutes a hostile act against that country," and urged him to report immediately to Congress on all activities involving US forces in Iran.

Bipartisan concern

Concern about presidential usurpation of the war power is not just a partisan matter. Former vice president Al Gore this year joined with former Republican congressman Bob Barr to express "our shared concern that America's constitution is in grave danger". As Gore explained, "In spite of our differences over ideology and politics, we are in strong agreement that the American values we hold most dear have been placed at serious risk by the unprecedented claims of the administration to a truly breathtaking expansion of executive power."

One of the stunning revelations of a recent spate of news stories is that top military brass are strongly opposed to the move toward military strikes. The Washington Post quotes a former Central Intelligence Agency (CIA) Middle East specialist that "the Pentagon is arguing forcefully against it". According to Hersh's reporting in The New Yorker, the Joint Chiefs of Staff "had agreed to give President Bush a formal recommendation stating that they are strongly opposed to considering the nuclear option for Iran".

The Bush administration is putting military officials in a position where they will have to decide whether their highest loyalty is to the president or to the country and the constitution. Retired Lieutenant-General Gregory Newbold, who recently called for the resignation of Defense Secretary Donald Rumsfeld, has criticized the US military brass for its quiescence while the Bush administration pursued "a fundamentally flawed plan" for "an invented war". Now he is calling on serving military officers to speak out.

The "generals' revolt" has not publicly targeted the plans to attack Iran. But its central critique concerns Rumsfeld's disregard for the US military's evaluation of the costs of the Iraq war and the scale of commitment it would require. Even if the generals don't speak about Iran specifically, their arguments about the costs of the Iraq war logically fit a future Iran war too.

The American people are by now deeply skeptical of Bush's reliability in matters of war and peace. In a recent Los Angeles Times poll, 54% of respondents said they did not trust Bush to "make the right decision about whether we should go to war with Iran", compared with 42% who did. Forty percent said the war in Iraq had made them less supportive of military action against Iran. But Americans are being systematically deprived of any alternative view of the Iranian threat, the consequences of US policy choices, or the real intentions of the Bush administration.

Congress and the US military allowed the Bush administration to bamboozle the country with false information and scare talk prior to the Iraq war - and they share responsibility for the resulting catastrophe. Now we're hearing again talk about mushroom clouds. It's up to Congress and the military to make it clear that the president does not assume monarchical power over questions of war and peace.

Congress and the American people - who should make the decision about war and peace - haven't even heard the forceful arguments of military officials against military strikes. Calling those Pentagon officials to testify - and protecting them against administration reprisals - would be a good place to start.

Gardiner, who specializes in war games and conducted one for The Atlantic Monthly magazine that simulated a US attack on Iranian nuclear facilities, concluded, "It's a path that leads to disaster in many directions." Unless preceded by a United Nations endorsement or an imminent Iranian attack, it's also aggression, a war crime under international law and the UN Charter. If Bush or his subordinates have already ordered military operations in Iran, it should be considered a criminal act, Gardiner said.

The DeFazio resolution could provide a rallying point for a coalition to act preemptively to put checks and balances on the Bush administration's usurpation of constitutional powers. Indeed, the growing evidence that the United States is already conducting military operations in Iran demonstrates the urgency of placing limits on executive power.

Anyone in the United States who wants to avoid national catastrophe should get busy defending it. Otherwise, Bush's legacy may be: "He bombed Iran, and the collateral damage wiped out the constitution."

Legal analyst Brendan Smith and historian Jeremy Brecher are the editors, with Jill Cutler, of In the Name of Democracy: American War Crimes in Iraq and Beyond (Metropolitan/Holt, 2005) (www.americanempireproject.com), and the founders of www.warcrimeswatch.org .

Last month, the United Nations Security Council passed a statement asking Atomic Energy Agency head Mohamed ElBaradei to report simultaneously to the council and the IAEA board by April 28 on whether Iran had halted enriching uranium, a process that can produce fuel for nuclear warheads. To date, Tehran has refused to do so.

Javad Zarif, the Iranian ambassador to the UN, has repeatedly relayed the official position. Iran's nuclear program is peaceful; there is no proof of a military development; the religious leadership opposes atomic weapons; and Iran has not invaded or attacked any nation for the past 250 years.

The power spheres in Iran seem to bet that even in the event of a shock and awe of B-2s, missiles and bunker busters, that simply is not enough to snuff out accumulated Iranian nuclear know-how and the quest to master the nuclear fuel cycle. So the only real question would be for how many years the US would be able to slow down Iran's nuclear program.

Is that all there is? Not really.

As some Iranian analysts and ministry officials have told Asia Times Online in Tehran off the record, there are reasons to believe the leadership is misreading an avalanche of US signs related to the military and psychological preparation for a possible war.

For instance, fundamentalist Christians in the US - who support Zionism for theological reasons - unleashed a ferocious media campaign depicting Iranian President Mahmud Ahmadinejad as the Antichrist who wants to destroy Jerusalem and prevent Jesus' comeback.

There are even indications that the Iranian leadership has not taken the Bush administration's explicit desire for regime change seriously. It's as if the leadership is persuading itself Washington would never dare to escalate the situation - especially after such US bodies as the Union of Concerned Scientists and the National Academy of Sciences have stated that a tactical nuclear strike could kill more than a million Iranians.

At Monday's press conference, Ahmadinejad, asked about possible military strikes, smiled broadly and dismissed the notion. "Military attacks? On what pretext?" he asked, adding that Iran was strong and could defend itself.

Earlier, Iranian Defense Minister Mostafa Mohammad-Najjar said any US military attack over Iran's nuclear program would result in a humiliating defeat for the United States, the official Islamic Republic News Agency (IRNA) reported.

But what if the Bush administration and the Ahmadinejad presidency were bluffing each other into a nuclear war?

Pick your faction

The key question is which Iranian leadership will have the final say. There are at least four main factions in the complex Iranian game of power politics.

The first faction is a sort of extreme right, closely aligned from the beginning to the Egyptian Muslim Brotherhood and involved with a rapprochement with Sunni Arabs in general, while opposing even a tactical rapprochement with the US.

The faction includes the dreaded hojjatieh (a semi-clandestine, radically anti-Sunni organization) and the Iranian Hezbollah, which supports both the Lebanese Hezbollah and the Arab nationalism of Muqtada al-Sadr in Iraq. Former defense minister Ali Chamkhani - whom Asia Times Online was told in Tehran could not talk to the foreign press - is very close to this faction. They are very conservative religiously and socialist economically.

The difference between the Iranian and the Lebanese Hezbollah is that in Beirut Hezbollah is much more active, pushing to be at the heart of political life and improving people's living conditions.

The role of Ahmadinejad - a former Revolutionary Guards (Pasdaran) middle-rank official - in molding this first faction has been crucial. In 2005, Supreme Leader Ayatollah Ali Khamenei had the support of former president and Machiavellian master of ambiguity, Hashemi Rafsanjani, at the highest levels of power - the Expediency Council.

But as a balancing act the supreme leader also decided to boost the profile of Ahmadinejad, who happened to be totally opposed to the pragmatist Rafsanjani. To add more arabesques to this Persian miniature, Khamenei's favorite candidate in the 2005 presidential elections was actually Baqer Qalibaf, a former chief of police - basically a conservative but in favor of a controlled opening of political life, the supreme leader's own policy.

What this all means is that Ahmadinejad - even winning against Rafsanjani and Qalibaf - and as the new leader of the extreme right is not really in charge of the government. It's an open secret in Tehran that the Pasdaran intervened in the elections through massive fraud. This has led in the past few months to the formation of an anti-Ahmadinejad coalition that ranges from Qalibaf supporters to - believe it or not - pro-secular intellectuals close to former president Mohammad Khatami.

The supreme leader knew that Ahmadinejad would revive the regime with his populist rhetoric, very appealing to the downtrodden masses. But the ruling ayatollahs may have miscalculated that since they control everything - the Supreme National Security Council, the Guardians Council, the foundations, the army, the media - they could also control the "street cleaner of the people". That was not the case, so now plan B - restraining the president, and the powerful Pasdaran - is in order.

The second key faction is composed of provincial clerics, whose master is the supreme leader himself. These are pure conservatives, attached to the purity of the Islamic Revolution of 1979, and more patriotic than the first faction. They are not interested in more integration with Sunni Arabs. Faithful to the supreme leader, they want to keep both progressives and extremists "in the same house" (Ahl al Bait) , with the velayat-e-faqih - the role of jurisprudence - as the supreme law of the land. Ever since the 2004 parliamentary elections - largely boycotted by the Iranian population - an association of clerics totally dominates the majlis (parliament).

But there are huge problems behind this appearance of unity. Iranian money from the bonyads - foundations - badly wants a reconciliation with the West. They know that the relentless flight of both capital and brains - which is being actively encouraged by the Rafsanjani faction - is against the national interest. But they also know this can hurt Ahmadinejad's power. Some Western-connected Iranians are even comparing Ahmadinejad's current days to the Gang of Four in China a little while before the death of Mao Zedong in 1976.

The Pasdaran for their part want to keep their fight against Zionism and go all the way with the nuclear program. This entails the extraordinary possibility of a US attack against Iranian nuclear sites counting on the complicity of a great deal of the mullahcracy - which does not hide its desire to get rid of Ahmadinejad and his Pasdaran "gang".

All going the Machiavellian's way?

The third faction is the left - initially former partisans of the son of ayatollah Ruhollah Khomeini, Ahmad Khomeini, who died in mysterious circumstances in the 1990s. After that they operated a spectacular mutation from Soviet-style socialism into some sort of religious democracy, which found its icon in former president Khatami of "dialogue of civilizations" fame. They became the so-called progressives - and even if they lost the 2004 and 2005 elections, they are still a force, although already debilitated by the slow awakening of a younger, more secular and more radical opposition.

The fourth and most unpredictable faction is Rafsanjani's. The consummate Machiavellian masterfully retained his own power from the late 1990s, juggling between Khamenei and Khatami. He may be the ultimate centrist, but Rafsanjani is and will always remain a supporter of the supreme leader. What he dearly wants is to restore Iran's national might and regional power, and reconcile the country with the West, for one essential reason: he knows an anti-Islamic tempest is already brewing among the youth in Iran's big cities.

As head of the Expediency Council, fully supported by the supreme leader, and in his quest to "save" the Islamic Revolution, Rafsanjani retains the best possible positioning.

Meanwhile, Ahmadinejad holds as much power as his predecessor - the urbane, enlightened and sartorially impeccable Khatami: that is, not much. What Ahmadinejad's obvious excesses are doing is to solidify the support the Rafsanjani faction is getting from the intelligentsia as well as the urban youth, not to mention the "enlightened police" faction of Qalibaf. This does not mean that another revolution is around the corner - as the Bush administration's wishful thinking goes.

Apart from these four factions, there are two others that are outside the ironclad circle of supreme-leader power: the revolutionary left and the secular right. Clerics call them biganeh (eccentric), and the denomination may be correct to a point, as both these groups are mostly disconnected from the majority of the population, although they also support the nuclear program out of patriotism.

The extreme left hates the mullahcracy, but has also derided Khatami's moderately progressive agenda. As for the Westernized liberals - which include former supporters of deposed prime minister Mohammad Mossadegh and members of the Freedom Movement of Iran, an opposition party, they are becoming increasingly popular with Tehran students, who are more and more pro-American (if not in foreign policy at least in behavior and cultural preferences).

The regime may in essence be unpopular - because of so much austerity and the virtual absence of social mobility - but for millions it is still bearable. No one seems to be dreaming of revolution in Iran. What is actually happening is the slow emergence of a common front - bent on the restoration of the power of the Iranian state through an alliance with Shi'ism in Iraq, Bahrain and Lebanon.

This may be interpreted as a Shi'ite crescent by alarmist Sunni Arabs, but there's no military, expansionist logic behind it. The common front is also in favor of moving toward a more market economy and a progressive liberalization of morals and public opinion. This is what one hears in Tehran from young people, women, workers in the cultural industry, and philosophers - and it is Tehran that always sets the agenda in Iran.

If the regime does not open up, the Iranian economy will never create enough jobs over the next few years to fight unemployment among its overwhelmingly young population. A great deal of the non-oil-dependent private sector is controlled by the bonyads, whose managers are usually incompetent and corrupt clerics.

Many Iranians know that an economic crisis - high oil prices notwithstanding - will rip the heart out of the lower middle class, the regime's base, and more crucially the industrial working class, which used to be aligned with the Tudeh, Iran's communist party.

There is a way out

They key to solving most of Iran's problems lies in finding a compromise with the West - especially the Americans - regarding the nuclear dossier. For all his vocal, popular support in the provinces, if Ahmadinejad and his Pasdaran hardliners go against this national desire for stability and progress, they will be sidelined.

Demonizing Western parallels of Iran enriching a few grams of uranium as akin to Adolf Hitler's march into the Rhineland is positively silly. So far Iran has only disregarded a non-binding request from the UN Security Council. The uranium-enrichment program may be under the operational control of the Pasdaran, but Ahmadinejad does not set Iran's nuclear policy: the supreme leader does, his guidelines followed by the Supreme National Security Council, which is led by the leader's protege, Ali Larijani. Khamenei and Larijani have both substantially toned down the rhetoric; Ahmadinejad hasn't.

The point is not that Ahmadinejad is a suicidal nut bent on confronting the US by all means available. The point is that the president leads just one of four key factions in a do-or-die power play, and he is following his own agenda, which is not necessarily the Iranian theocratic leadership's agenda. Washington neo-conservatives for their part may want regime change - but that won't happen with another shock and awe.

Ahmadinejad is playing the typical Bonapartist - using a political deadlock to go all the way toward dictatorship. Rafsanjani may also be a Bonapartist, but the difference is he's not interested in dictatorship.

The ideal outcome of this whole "nuclear crisis" would be an Iran moving to a moderately liberal alliance between eternal pragmatist Rafsanjani - the only one capable of subduing the Pasdaran - and the semi-secular left, which still regards Khatami as the least bad of all possible models. It may not be paradise, but it certainly beats war.