Echoing US President Bush, Rice expressed doubts about the chances of Iranian President Khatami and his reformist allies to overcome the hardline clerical establishment and move ahead with reforms. 'We are concerned that Iran is a place where an unelected few are really crushing the aspirations of their people,' she said. Foreign Ministry spokesman Hamid Reza Asefi described the allegations as 'baseless'. 'Nobody believes them since we have fought terrorism as our national and international responsibility, and we have proved it in our reaction to the Taliban and Al-Qaeda,' he said on 16 August.

Local press reports on 20 August suggested that a state of emergency might be declared in Iran in order to protect the country against US threats. 'The possibility of a state of emergency exists and that would be a form of coup d'etat against the reformist camp,' the Khorassan daily quoted reformist Karim Argandepour as saying. 'Certain extremists in the conservative camp are seeking to create such an exceptional situation.' Other members of the political establishment confirmed that rumours about conservative leaders calling for a state of emergency were circulating in the country.

Government spokesman Abdollah Ramezanzadeh on 21 August denied the rumours, saying there 'is no need to declare a state of emergency. As far as the government is concerned, to keep the promises it made, an atmosphere of calm is needed, where the law rules. We hope that atmosphere will prevail.'