A major rift is opening between President Mahmoud Ahmadinejad and Supreme Leader Ayatollah Ali Khamenei. Even more serious is the potential demise of Iran’s clerical system.

Khamenei is 72 years old. If he dies in office, observers say there is a real chance previously suppressed protesters will use the resulting vacuum to rise up against the regime. Meanwhile, beyond Iran’s borders uprisings are reshaping the political landscape of the region, creating further challenges for the leadership.

Clerical failure in Iran

“It is possible that if the Supreme Leader dies in office, conditions could be ripe for popular uprisings against the current system,” says Hossein Askari, Iran professor of International Business and International Affairs at George Washington University in the US.

By helping Ahmadinejad into office twice …Ayatollah Khamenei believed he would have a … docile man in office

Ali Alfoneh, American Enterprise Institute for Public Policy Research

“If there is a coup, [whether it is] the IRGC [the Islamic Revolutionary Guards Corps, which is officially subordinate to the Supreme Leader], Ahmadinejad or a popular uprising, I believe Iran will not go back to the clerical system. People are disappointed by economic injustice, failure and corruption.”

Analysts say the only way the current system could survive is if a successor is groomed. But, any successor would need to be popular and the IRGC would have to decide to back him after Khamenei’s death.

The IRGC has benefited from the Ahmadinejad era. After helping to supress the Green Movement protests, it has be able to expand its influence and has seized an ever greater share of oil revenues. The power it has is increasing and it already dominates the major sectors of the Iranian economy. Some see its importance now eclipsing that of the clerics and its actions determining the future direction of the country.

“The IRGC in the last two or three months are supporting the Supreme Leader [but] IRGC see their interests more with Ahmadinejad,” says Askari. “The ones you want to watch are the IRGC. They will determine what will happen. In the end, it’s all to do with money.”

The IRGC is more powerful than ever in Iran due to the public rift between Khamenei and Ahmadinejad, a great cause for concern in Tehran. In Iran’s disputed 2009 presidential election, Ahmadinejad’s victory was spoken among the clerics as a “divine assessment”. Two years later, his reputation is very different.

Ahmadinejad began to open a rift when, in April, he forced the resignation of the Intelligence Minister Heider Moslehi, a close ally of the Supreme Leader. Khamenei refused to accept his resignation and reinstated him. In response, Ahmadinejad boycotted his official duties for 10 days.

In a move that further angered Khamenei, Ahmadinejad dismissed the oil minister in May and appointed himself caretaker oil minister.

“Ahmadinejad is trying to incite confrontation with the Supreme Leader and this will force the Revolutionary Guards to choose to support Ahmadinejad or support the clergy. If they were forced to make a choice, they would choose Ahmedinajad. He is just one man, there are 500,000 clergy in Iran,” says Askari.  Ahmadinejad’s recent appointment of an IRGC commander as oil minister is seen by some as a ploy to get the guards on his side.

Members of the parliament (Majlis) moved to impeach him over his unexplained absence, but it is unclear if this will happen.

“It is evident that parliament would love for that to happen, but the Supreme Leader has indicated that despite the disagreements, he would rather see Ahmadinejad’s presidency run its course through to the end,” says a Tehran-based analyst.

A Western source based in Tehran says the Majlis appears to have dropped the possibility of impeaching the president, a decision which coincided with the June resignation of the deputy foreign minister, an Ahmadinejad loyalist.

But the mistrust between president and Supreme Leader remains. It was the Intelligence Ministry’s electronic surveillance of the office of Ahmadinejad’s closest adviser Esfandiar Rahim Mashaei that led to the forced resignation of Moslehi in the first place.

Ahmadinejad’s greater ambitions

Following an ultimatum issued by Khamenei, Ahmadinejad returned to office to find several of his allies had been arrested, including his own candidate for the post of intelligence minister. One thing that is clear is that Ahmadinejad has far greater ambitions than to follow Khamenei’s orders.

“By helping Ahmadinejad into office twice, Ayatollah Khamenei believed he would have an unstatesmanlike and docile man in office. But in reality, Ahmadinejad and the generation of war veterans he brought to office has systematically changed the elites of the Islamic Republic and introduced a new ideology,” says Ali Alfoneh, resident fellow at the American Enterprise Institute for Public Policy Research in Washington.

“Khamenei was too late in discovering the fact that Ahmadinejad, in reality, is a revolutionary while [the previous presidents] Rafsanjani and Khatami were reformers.”

Ahmadinejad is already seen to be grooming Mashaei to be his successor. The bond between the two is not just political; the men also share family ties since Ahmadinejad’s son is married to Mashaei’s daughter.

Iran’s weakened government

Parliamentary elections are scheduled to take place in 2012 and the presidential election is due to take place in 2013. The main impact of any political rift, especially at the highest echelons of politics, weakens the regime itself.

“The government has been significantly weakened, the parliament has been divided into lots of groups, but the Supreme Leader’s position remains strong, although some argue that he has compromised his authority by regular intervention in ordinary matters,” says the Tehran analyst. “What I can say with more certainty is that this level of tension between different pillars of the Islamic Republic is unprecedented.”

Alfoneh agrees. “The regime is weakened by the fact that more than half of the political elites [reformists] have been cut off from the political process in the wake of the 2009 presidential election,” he says.

In addition, the civilian leadership is also weakened because the IRGC takes advantage of the infighting between the civilians to secure more power for itself.

In July, Khamenei appointed a mediator to oversee the rift between himself and Ahmadinejad. The appointment of Ayatollah Mahmoud Shahroudi, a close ally of Khamenei, is significant and Ahmadinejad could be forgiven for being concerned. The last time a mediation council was appointed was just before the impeachment of Iran’s first president, Abol-Hassan Bani Sadr, who is now in exile.

“The historical parallel desires to remind Ahmadinejad and the Iranian public that Ahmadinejad could suffer the same destiny as the ill-fated Bani Sadr,” says Alfoneh.

“It remains to be seen if this move will make Ahmadinejad more cooperative.”

Others, however, say that the appointment of a mediator does not signify any great change.

“It is difficult to say. As ever, Iranian politics are incredibly opaque. Iranians don’t see this as heralding a dramatic change. The dispute has calmed down on both sides. It is like a black box, you see the results of decisions made rather than the decisions themselves … the president and Supreme Leader appear to be trying to form a compromise, which appears to imply that Ahmadinejad and [the] Supreme Leader are [forging ties], but it is impossible to tell,” says the Western source.

Shahroudi will now preside over an arbitration body, but inevitably the outcome will be whatever Khamenei wants.

“Right now, mediation will take over everything. It is all in the hands of Shahroudi. None of the other things are on the table. Ahmadinejad wants a fight, he would like Khamenei to try to fire him because then he presents the IRGC with a choice,” says Askari.

At the same time, Iran faces regional challenges. Tehran has made clear its support for the uprisings in Libya, Syria and Bahrain. But while supporting anti-government demonstrators elsewhere, its repression of domestic protests remains as brutal as ever.

In a February speech, the Supreme Leader responded positively to the regional uprisings.

“The enemy is driving its equipped security forces to spread terror and chaos among people. Do not fear them; you are more powerful than those hired people,” he said.

The words were particularly striking given the domestic context, where the regime moved quickly to suppress protests in Tehran.

Hundreds of security forces, including the volunteer Basijis militia on motorbikes were deployed to crush the protests, with the regime giving a very clear message of ‘We will kill’. Only when the protests were well-contained were they reported in the local press.

“The propaganda of the Islamic Republic depicts the regional uprisings as a wave of Islamic awakening inspired by the revolution of 1979, but in reality the leadership in Tehran is as distressed as its neighbours,” says Alfoneh.

The UK government also highlighted Iran’s “feigned support”.

“There has been a brutal crackdown on all those who freely and peacefully sought to express their views, and a concerted attempt to silence any opposition,” said Foreign Secretary William Hague in June. “And now, there is plenty of evidence that Iran is exporting these same repressive techniques to its longtime ally Syria, as Syria’s rulers brutalise their people to cling to power.”

That Iran has sent manpower, equipment and intelligence to Damascus to help with the uprising, is not surprising.

“From the Iranian regime’s point of view, it makes sense to send anti-riot forces to Syria to suppress protests,” says the analyst. “In my view, Iran will not let [Syria’s President] Bashar al-Assad’s regime be overthrown.”

Askari agrees. “Since the revolution, Syria has been Iran’s most important ally in the region without a doubt,” he says. “What is happening in Syria is disastrous for Iran. If [Bashar al-Assad] falls, Iran will have a hard time [supporting] Hezbollah … one element that gives Iran an important reach into the Arab world.”

The uprisings in Syria and Bahrain are particular sources of embarrassment to the regime. In Syria, Iran can no longer portray itself as the defender of the oppressed masses. Meanwhile, Iran’s desire to liberate Palestine sounds more hollow than ever as it has failed to support the Bahraini revolt due to GCC intervention.

Ongoing protests in Iran

“Rather than showing the strength of the Islamic Republic, the failed revolt of the Bahraini Shia has demonstrated limits to Iran’s power,” says Alfoneh. “This is the regime’s problem: Iran is not trusted by anyone in the region. To be identified with Iran is the kiss of death.”

Iran is supportive of the uprising in Bahrain, although there is little it can do to aid the Shia minority. Furthermore, despite government threats, protests are still going on in Iran.

“There have been very small, very isolated demonstrations that continue to go on. For example 10 days ago [end July] there was a demonstration of about 200 people in one of the main squares,” says the Western source. “They were obviously attached to the Green Movement. This was not reported in any newspapers. So they [protests] do continue but are met with a very large security presence.”

Whether the promise of a new Iran, one not pinned to the clergy, will be enough to inspire the young population to continue to pursue their freedom remains to be seen. Threats of imprisonment, torture and death loom large.

But if the Islamic Republic fails to regain the faith of the Iranian people and re-establish authority, it could unwittingly trigger the breakdown of the clerical system and this will change the way the country is run forever.