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French President Nicolas Sarkozy, speaking shortly after Khamenei, said Iranians deserved better leadership and pledged to support Britain in its standoff with Tehran. "Really, the Iranian people deserve better than the leaders they have today," he said at a news conference with British Prime Minister Gordon Brown, pledging France's full support for Britain in the dispute over the embassy detentions.

In Qom, Grand Ayatollah Saanei issued a fatwa prohibiting working with the Ahmadinejad government based on the consideration that it is an illegitimate government. He considers this “religiously prohibited.” Therefore, amongst grand Ayatollahs and members of the Assembly of Experts questions are being raised about the “validity of the Supreme Leader.” So the Assembly of Experts’ priority now is to be sure about the Supreme Leader and if they find that he is not valid then it has the right to dismiss him from his position. That is what the constitution says.

these elections have not only deepened divisions between the nation, the government and the authorities; they have also deepened divisions between effective elements of the ruling elite in Iran. Hashemi Rafsanjani, the head of the Assembly of Experts and of the Expediency Discernment Council, who has significant political weight, was president for two terms so he has influence within the elite. [Mohammad] Khatami was president for eight years. [Mehdi] Karroubi was Parliament Speaker. All of these people are standing against Khamanei and Ahmadinejad. What I will say is that the divisions within the ruling elite in Iran are not only deepening; they are taking place openly for everyone to witness.

My fear is that if there is no wise and rational response to the crisis the leadership of the reformist movement, and even Mir Hossein Moussavi himself, will not be able to control the protestors.

here are statistics that show that Moussavi won the elections and that Karoubbi came second and Ahmadinejad third. This means that there must be some kind of settlement behind the scenes between governing parties in Iran to take the elections to a second round between Ahmadinejad and Moussavi. This is the only way they could save face.

If the Council of Experts is saying ‘raise your complaints’ then this means that the Supreme Leader was wrong to congratulate Ahmadinejad so quickly

I believe that the one way to solve this situation is by accepting a compromise to hold a second round of elections between Ahmadinejad and Moussavi. In this round, nobody would dare interfere with the voting and there will be more supervision over the voting process and Moussavi will win.

Q) But he has the support of the Revolutionary Guards, which in turn support Ahmadinejad. Isn’t that a source of power for him?A) If we look back on the history of the Middle East, including my country Iran, there have been instances when the military itself has killed its own king.

Speaking to a large crowd in the holy city of Mashhad, Ayatollah Khamenei said Iran had "no experience with the new American government and the new American president". One gesture the US administration could make would be to ease some sanctions on passenger aeroplanes and spare parts Cyrus, Tehran Iran views: Obama message "We will observe them and we will judge," he said. "If you change your attitude, we will change our attitude." In the speech, which was carried live by Iranian television, he said Iran was yet to see such a change. "What is the change in your policy?" he asked.

Speaking to a large crowd in the holy city of Mashhad, Ayatollah Khamenei said Iran had "no experience with the new American government and the new American president".

Speaking to a large crowd in the holy city of Mashhad, Ayatollah Khamenei said Iran had "no experience with the new American government and the new American president". One gesture the US administration could make would be to ease some sanctions on passenger aeroplanes and spare parts Cyrus, Tehran Iran views: Obama message "We will observe them and we will judge," he said. "If you change your attitude, we will change our attitude." In the speech, which was carried live by Iranian television, he said Iran was yet to see such a change. "What is the change in your policy?" he asked. "Did you remove the sanctions? Did you stop supporting the Zionist regime? Tell us what you have changed. Change only in words is not enough."

A Sunni opposition group known as Jundullah (God's Soldiers), which Iran links to al-Qaida and the US, claimed responsibility for the mosque bomb.

The Saudi-owned al-Arabiya television said a man claiming to represent Jundullah called it saying the bombing was a suicide attack aimed at Basiji forces, a religious militia, that were meeting in the mosque to co-ordinate election strategy.

Iran's leaders have repeatedly blamed US and Israeli "spy agencies" for arming and assisting insurgent groups, including dissident Kurds living in western Iran. They say the aim is to destabilise Iran and promote regime change.

Ayatollah Ali Khamenei, Iran's supreme leader and a strong, public backer of President Mahmoud Ahmadinejad's bid to win a second term, added his weight to the claims. "No one can doubt that the hands of … some interfering powers and their spying services are bloodied by the blood of the innocent," he said.

Major General Hassan Firouzabadi, Iran's armed forces chief of staff, also blamed outside forces, pointing the finger at Britain in particular. "The attempts made by colonialism, Zionism and on top of them England for sowing discord between Shias and Sunnis have yielded no result," he said.

Any direct or indirect US involvement in fomenting pre-election tensions is considered unlikely, given Obama's new policy of engagement with Iran. Israel, which believes Iran poses an existential threat, takes a harder line.

Unconfirmed reports published in the US last year said the Bush administration obtained $400m in "off-the-books" congressional funding to finance covert operations aimed at assisting minority Ahwazi Arab and Baluchi groups and other dissident organisations inside Iran. It is unclear whether these alleged operations have continued since Obama took office.

Ali Akbar Velayati, Supreme Leader Ayatollah Ali Khamenei's top adviser on international affairs, said Western countries did not want the Islamic state to have peaceful nuclear activities, state broadcaster IRIB said on its website.

Sarkozy, upping the stakes in the dispute with Tehran, said the powers would review the situation at a G20 meeting of developed and developing countries in Pittsburgh on September 24-25.

However, Sarkozy made clear Russia was still dragging its feet over the issue and had pushed for more time before considering a fresh round of sanctions.

The announcement came on a day when Mr. Moussavi released documents detailing a campaign of fraud by the current president’s supporters, and as a close associate of the supreme leader called Mr. Moussavi and former President Mohammad Khatami “foreign agents,” saying they should be treated as criminals.

The documents, published on Mr. Moussavi’s Web site, accused supporters of the president of printing more than 20 million extra ballots before the vote and handing out cash bonuses to voters.

The association includes reformists, but Iranian political analysts describe it as independent, and it did not support any candidate in the recent election. The group had earlier asked for the election to be nullified because so many Iranians objected to the results, but it never directly challenged the legitimacy of the government and, by extension, the supreme leader.

The clerics’ statement chastised the leadership for failing to adequately study complaints of vote rigging and lashed out at the use of force in crushing huge public protests.It even directly criticized the Guardian Council, the powerful group of clerics charged with certifying elections. “Is it possible to consider the results of the election as legitimate by merely the validation of the Guardian Council?” the association said.

Many of the accusations of fraud posted on Mr. Moussavi’s Web site Saturday had been published before, but the report did give some more specific charges. For instance, although the government had announced that two of the losing presidential contenders had received relatively few votes in their hometowns, the documents stated that some ballot boxes in those towns contained no votes for the two men.

But outside analysts said the suspicions surrounding Mr. Ahmadinejad’s re-election would create new problems. “This is the worst result,” said Thomas R. Pickering, a former under secretary of state. “The U.S. will have to worry about being perceived as pandering to a president whose legitimacy is in question. It clearly makes the notion of providing incentives quite unappetizing.”

Many analysts and Middle East officials asserted that the outcome reinforced the reality that ultimate power resides not in the democratically elected president, but rather in Iran’s supreme religious leader, Ayatollah Ali Khamenei.“We should be clear about what we’re dealing with,” said Karim Sadjadpour, an Iran expert at the Carnegie Endowment for International Peace. “Just as we deal with Assad’s Syria and Mubarak’s Egypt, we now have to deal with Khamenei’s Iran,”

In Israel, which has hinted that it might launch a military strike on Iran to disable its nuclear capability, officials said Mr. Ahmadinejad’s victory underscored the threat from Tehran and the need for a tough response rather than patient diplomacy.Vice Prime Minister Silvan Shalom said in Tel Aviv that the victory “sends a clear message to the world” that Iran’s policies have broad internal support and will be continued. The results, he added, also “blow up in the faces of those” who thought Iran was ready for “a genuine dialogue with the free world on stopping its nuclear program.”

“It is easy to insult and confront and have Iran as a foe when Ahmadinejad is president,” said an Egyptian diplomat, speaking on condition of anonymity in keeping with diplomatic protocol. “A lot of people would have been inconvenienced if someone else had become president.”

Mr. Obama, officials said, has long said he was willing to negotiate with whoever would respond, including Ayatollah Khamenei. “The administration will deal with the situation we have, not what we wish it to be,” another senior official said.

For the United States, the larger problem is that while the election has frozen the dialogue, Iran’s nuclear program has speeded ahead. This month, the International Atomic Energy Agency reported that by May’s end, Iran had built and installed 7,200 centrifuges to enrich uranium and was quickly adding to its stock of nuclear fuel.

Now, the administration faces a vexing choice. It can continue to demand that Iran give up all of its enrichment capability — still the official position of the United States, but considered an all but impossible goal. Or it can tacitly accept that Iran is not going to stop enriching.

The council earlier this week said it would carry out a partial recount, but had ruled out a re-run of the poll demanded by Mr Mousavi.

However, opposition supporters are likely to be more encouraged by a statement from the Assembly of Experts - Iran's top clerical body responsible for appointing the supreme leader and, in theory, monitoring his performance. "We congratulate the excited, epic-making and alert presence of 85% of the revolutionary people" in the election, the statement said. It made no mention of the disputed result.

The Assembly of Experts is headed by former President Akbar Hashemi Rafsanjani, who is a strong supporter of Mr Mousavi and a key rival of Mahmoud Ahmadinejad. The question now, our correspondent says, is whether Mr Rafsanjani will make his power play, and possibly challenge the supreme leader himself.

She said a Wall Street Journal colleague had been "interviewing a young man on the street the other night, and one of the militiamen came up and put a bullet through his neck and killed him".

Mr Rafsanjani's daughter, Faezeh, addressed supporters of Mr Mousavi on Tuesday. The Fars news agency said on Thursday that Faezeh and her brother Mehdi had been barred from leaving Iran over their alleged role in the unrest.

Mr Mousavi and reformist former President Mohammad Khatami have sent a joint letter to the head of the judiciary asking for an end to "the violent actions against people and to free those arrested".

Ebrahim Yazdi, a foreign minister after the 1979 revolution and now leader of the Freedom Movement of Iran, was arrested while undergoing tests at a hospital in Tehran, a spokesman for his organisation said.

Last night saw violent clashes after Ahmadinejad was confirmed as the winner of the presidential election on Friday, barely an hour after the polls had closed.Protesters set fire to rubbish bins and tires, creating pillars of black smoke among the apartment blocks and office buildings in central Tehran. An empty bus was engulfed in flames on a side road.

More than 100 reformists, including Mohammad Reza Khatami, the brother of former president Mohammad Khatami, were arrested last night, according to leading reformist Mohammad Ali Abtahi. He told Reuters they were members of Iran's leading reformist party, Mosharekat.

A judiciary spokesman denied they had been arrested but said they were summoned and "warned not to increase tension" before being released.

Mousavi, who had been widely expected to beat the controversial incumbent if there was a high turnout - or at least do well enough to trigger a second round - insisted he was the victor and appealed against the result to Ayatollah Ali Khamenei.

But Khamenei replied that the election had been conducted fairly. He ordered the three defeated candidates and their supporters to avoid "provocative" behaviour. "All Iranians must support and help the elected president," he warned.

Israel reacted immediately by demanding intensified efforts to stop Iran acquiring nuclear weapons.

"The regime is making a decision to shape the direction of Iran for the next decade," Saeed Laylaz, a political analyst, said. "I'm sure they didn't even count the votes. I do not accept this result. It is false. It should be the opposite. If Ahmadinejad is president again, Iran will be more isolated and more aggressive. But he is the choice of the regime."

Laylaz had warned before the result that a second presidential term for Ahmadinejad could create a "Tiananmen-type" situation in Iran. Ominously, as three weeks of campaigning drew to a close last Wednesday, an official of the powerful Revolutionary Guard Corps warned that any attempt at a popular "revolution" would be crushed.

Overt signs of repression included the failure of phone lines for hours after the polls closed and the blocking of the English and Persian-language websites of the BBC and Voice of America - which are regularly attacked by the Iranian authorities as "imperialist". Text messaging also failed.

During the presidential campaign of 2005, the supreme leader endorsed Mr. Ahmadinejad because the humble son of a blacksmith appeared to be just such an obscure candidate. But he entered the presidency with a coterie of veterans and ideologues shaped by the Iran-Iraq war who were conservative, religious, largely populist and disdainful of the old guard from the 1979 revolution.

Today, these allies, many of them former midlevel Revolutionary Guard officers in their 50s, run the Interior, Intelligence and Justice Ministries. They also include the commander of the Basij popular militia, the head of the National Security Council and the head of state-run broadcasting. They are aligned with another member of their generation who has emerged as the most important figure in the Khamenei camp, the spiritual leader’s son, Mojtaba Khamenei.

Mr. Ahmadinejad has also changed all 30 of the country’s governors, all the city managers and even third- and fourth-level civil servants in important ministries like the Interior Ministry. It was Interior that announced that Mr. Ahmadinejad had won the June 12 election with just 5 percent of the votes counted, analysts pointed out, and it is the Intelligence Ministry that has been rounding up scores of supporters of the reform candidate, Mir Hussein Moussavi, and other dissidents.

At the same time, Ayatollah Muhammad Taqi Mesbah-Yazdi, Mr. Ahmadinejad’s spiritual mentor, runs three powerful educational institutions in the holy city of Qum, all spun off from the Haqqani seminary, which teaches that Islam and democracy are incompatible. The ayatollah favors a system that would preserve the post of supreme leader and eliminate elections. The Ahmadinejad administration has provided generous government subsidies to the seminary, and its graduates hold significant government posts nationwide.

Perhaps the most important media organization to spread the government’s message is the hard-line Kayhan newspaper. Its general director, Hossein Shariatmaderi, in recent days has resurrected a standard accusation: that foreign governments were manipulating the demonstrations on Iran’s streets.

Mr. Moussavi, the defeated candidate who embodied the hopes of reformers, posted a notice on his Web site of a late afternoon rally in front of the Parliament, but he distanced himself from the action, saying it was not organized by the reform movement. It is not clear how far Mr. Moussavi, a former prime minister who is essentially an insider thrust into the role of opposition, would go to defy the system. He has not been seen since Thursday. So as the crackdown infuriates protesters, there is a greater gap with their ostensible leader, political analysts said.

Those arrested include officials who served from the founding of the Islamic republic in 1979, until Mr. Ahmadinejad’s election in 2005: Behzad Nabavi, a former deputy speaker of Parliament; Mohsen Aminzadeh, a key figure at the Intelligence Ministry for many years; Mostafa Tajzadeh, a deputy interior minister during the presidency of Mohammad Khatami; Mohammad Ali Abtahi, a vice president under Mr. Khatami; and Abdullah Ramezanzadeh, Mr. Khatami’s spokesman. They were all close to Mr. Khatami, then threw their support behind Mr. Moussavi.

The process of negotiation will surely prove just as important as the substance, at least in the beginning. Discussions with Iranians often take place in an elaborate, formal language, which establishes pecking orders and conveys unspoken messages. Concealment and dissimulation are not regarded as negative behavior, and speaking in broad terms of theory and history is commonplace.

From my own experience, Iranians spend a good deal of time at the beginning of a discussion invoking concepts such as "justice" and "respect" and saying that the Western approach to Iran has traditionally lacked both. But Iranian negotiators are very adept at avoiding the need to define these concepts in concrete terms or linking them to specific policy avenues. This tendency gives the conversation a circular dynamic that can be very frustrating. Faced with this tendency, Western negotiators should patiently and firmly, but also politely, insist that they be provided with practical links between these concepts on the one hand and policy issues on the other -- rather than endless rounds of exchanges over their esoteric meanings.

Western negotiators must also recognize that the stereotypical American style of negotiation -- blunt, direct, transactional -- irks and frustrates Iranians. Iranians fear that abbreviated and quick discussions deprive them of the context and the time they need to situate themselves to what is going on. All this argues for a long-term approach and not one that is linked to the need to "solve" any particular issue according to a unilateral timeline.

The Iranians are, justifiably, very proud of their history and culture. Their worldview flows from a sense of being the center of everything (a feeling many Americans share) due to their thousands of years of history. Iran's history also teaches them, not unfairly, that the outside world is usually a source of danger.

But Mr Obama warned: "This process will not be advanced by threats. We seek instead engagement that is honest and grounded in mutual respect." "The United States wants the Islamic Republic of Iran to take its rightful place in the community of nations. You have that right - but it comes with real responsibilities."

Mr Obama's message was distributed to news outlets in Iran with subtitles in Farsi, and posted on the White House's official website.

Shortly after coming to office in January, he said "if countries like Iran are willing to unclench their fists, they will find an extended hand from us". But earlier this month he extended sanctions against Iran for a year, saying it continues to pose a threat to US national security. In another possible move towards engagement, the state department is said to be considering an overture in the form of a letter to Iran's Supreme Leader Ayatollah Khamenei before the Iranian elections this summer.

Mr. Ahmadinejad and his allies have tried to demonize Mr. Rafsanjani as corrupt and weak, attacks that Ayatollah Ali Khamenei has not strongly discouraged. On the other side, opposition leaders, especially Mr. Moussavi, have received support from Mr. Rajsanjani, political analysts said.

It is a quirk of history that Mr. Rafsanjani, the ultimate insider, finds himself aligned with a reform movement that once vilified him as deeply corrupt. Mr. Rafsanjani was doctrinaire anti-American hard-liner in the early days of the revolution who remains under indictment for ordering the bombing in of a Jewish center in Buenos Aires in 1994 when he was president. But he has evolved over time to a more pragmatic view, analysts say.

He supports greater opening to the West, privatizing parts of the economy, and granting more power to civil elected institutions. His view is opposite of those in power now who support a stronger religious establishment and have done little to modernize the stagnant economy.

“At a political level what’s taking place now, among many other things, is the 20-year rivalry between Khamenei and Rafsanjani coming to a head,” Mr. Sadjadpour said. “It’s an Iranian version of the Corleones and the Tattaglias; there are no good guys and bad guys, only bad and worse.”

It is not clear what leverage Mr. Rajsanjani can bring to this contest. If he speaks out, the relative said, he will lose his ability to broker a compromise. Mr. Rafsanjani leads two powerful councils, one that technically has oversight of the supreme leader, but it is not clear that he could exercise that authority to challenge Ayatollah Khamenei directly.

Mr. Rafsanjani has been in opposition before. In the days of the shah, he was a religious student of Ayatollah Khomeini at the center of Shiite learning, in the city of Qum. He was imprisoned under the shah, and became so closely associated with the revolutionary leader he was known as “melijak Khomeini,” or “sidekick of Khomeini.”’ After 1979, he went on to become the speaker of Parliament.

Mr. Rafsanjani later served two terms as president and was instrumental in elevating Ayatollah Khamenei to replace Ayatollah Khomenei in 1989.

People who worked in the government at the time said that Mr. Rafsanjani, as president, ran the nation — while Ayatollah Khameini followed his lead. But over time the two grew apart, as Ayatollah Khameini found his own political constituency in the military and Mr. Rafsanjani found his own reputation sullied. He is often accused of corruption because of the great wealth he and his family amassed.

He was so damaged politically that after he left the presidency, he failed to win enough votes to enter Parliament. In 2002, he was appointed to the head of the Expediency Council, which is supposed to arbitrate disputes between the elected Parliament and the unelected Guardian Council.

And in 2005, he ran for president again but lost in a runoff to Mr. Ahmadinejad. He was then elected to lead the Assembly of Experts. The body has the power to oversee the supreme leader and replace him when he dies, but its members rarely exercise power day to day.

The assembly came up with a number of possible ways to solve the crisis in the country, that erupted following the June 12 election results which the opposition claimed was rigged. One proposed solution was the establishment of an alternative religious council, made up of several top ayatollahs, in a move against Khamenei.

"This move is meant to protect the regime from the dangers that threaten it," the source quoted by the paper said, citing danger that a deepening of the crisis would lead to greater polarization and put the regime at risk.   The source continued to say, "In light of the constitutional authority Rafsanjani and the Assembly of Experts hold, it is their duty to examine all propositions.

"The Assembly of Experts has been appointed to monitor the performance of the supreme spiritual leader, and if this performance contributes to increasing conflict between members of the Islamic Republic of Iran, the Assembly of Experts must try to use its authority to support the regime."

Rafsanjani's daughter Faezeh, and four other relatives, were arrested on Sunday after appearing in an opposition protest rally, in a possible attempt to pressure him into making a statement. They were released a few hours later.

Unless the street protests achieve unexpected momentum, the election could cast the pro-reform classes — especially the better off and better educated — back into a state of passive disillusionment, some opposition figures said. “I don’t think the middle class is ever going to go out and vote again,” one Moussavi supporter lamented.

Although his first election was marred by allegations of cheating, Mr. Ahmadinejad was credited with being genuinely street smart. He roused crowds with vague attacks on the corruption of the elite, with promises of a vast redistribution of wealth, and with appeals to Iranian pride. By playing to the Muslim world’s feelings of victimization by the West and hatred of Israel, he won adulation on the Arab street even as Arab leaders often disdained him, and that in turn earned him credibility at home.

As president he has presided over a time of rising inflation and unemployment, but has pumped oil revenues into the budget, sustaining a semblance of growth and buying good will among civil servants, the military and the retired. More important, he has consolidated the various arms of power that answer ultimately to the supreme leader. The Revolutionary Guards — the military elite — was given license to expand into new areas, including the oil industry and other businesses such as shipbuilding.

The Guardian Council, which oversees elections, had its budget increased 15-fold under Mr. Ahmadinejad. The council has presided over not only Friday’s outcome, but over parliamentary majorities loyal to Mr. Ahmadinejad.

The president seemed to stumble often. He raised tensions with the West when he told a United Nations General Assembly that he rejected the post-World War II order. He was mocked when he said at Columbia University in 2007 that there was not a single gay person in Iran. In April, nearly two dozen diplomats from the European Union walked out of a conference in Geneva after he disparaged Israel.

But political analysts said that back home, the supreme leader approved, seeing confrontation with the West as helpful in keeping alive his revolutionary ideology, and his base of power.

The election of Ali Khamenei as Iran's third president in 1981 restored order to the executive, but Khamenei (now Iran's Supreme Leader) operated in the shadow of Ayatollah Khomeini and "remained a weak and uncontroversial president," Milani notes. During Khamenei's presidency, Prime Minister Mir-Hossein Mousavi, a top challenger for the June 2009 presidency whose supporters believe was the victim of vote rigging, was credited with displaying strong leadership, especially on economic matters.

Even without the Supreme Leader's explicit consent, Iran's constitution does provide the president considerable autonomy; he unquestionably holds the second-most powerful office in Iran. Among the office's duties is the ability to appoint provincial governors, ambassadors, and cabinet members-key posts in Iran's government that hold significant sway in shaping the Supreme Leader's thinking

Kenneth Katzman, a specialist in Middle Eastern Affairs at the non-partisan Congressional Research Service, writes (PDF) in a May 2009 report that "the presidency is a coveted and intensely fought over position which provides vast opportunities for the president to empower and enrich his political base."

in the wake of the contested June 2009 vote, some analysts say the delicate balance between Iran's clergy and its elected officials may be in jeopardy of crumbling, especially if voters believe their ballots no longer count.

"There are demands that the Supreme Leader will oversee the regime without being its supreme commander," the source told Al-Sharq Al-Awsat, adding that the current crisis has already weakened Khamenei.

Alireza Nader, an expert on Iran with the RAND corporation, says Rafsanjani retains some leverage against Khamenei and Ahmadinejad as chairman of the Assembly of Experts. However, he says, Khamenei ignored a letter Rafsanjani wrote asking him to restrain Ahmadinejad, who accused the former president of corruption in a televised debate.Ignoring the letter, Nader said, "was perceived by many Iranians as a rebuke to Rafsanjani and his role in the political system."Rafsanjani's influence may have significantly dissipated as a result, he said."Rafsanjani is a son of the revolution," said Tellier of the International Crisis Group. "But his own future depends on how far the leader will allow Ahmadinejad to go in his attacks against Rafsanjani and his family."