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“The most important goal is to prevent Mr. Ahmadinejad from re-election, not to get Mr. Khatami elected,” Mr. Leylaz said. “The chances of getting a reformist president elected would decrease if we have several candidates running.”

In the meeting on Sunday, Mr. Khatami told campaign staff members that Mr. Moussavi might stand a better chance of winning than he would, the Mehr news agency reported.“Opponents want to divide my supporters and supporters of Moussavi,” Mr. Khatami was quoted as saying. “It is not in our interest. Also, some conservatives are supporting Moussavi.”He added, “Moussavi is popular and will be able to execute his plans, and I prefer he stays in the race.”

Mr. Leylaz said that Mr. Moussavi’s announcement to run came unexpectedly last week, even though Mr. Khatami had consulted with him before announcing his own bid for the office on Feb. 8. Before the announcement, Mr. Khatami had said that he would run only if Mr. Moussavi did not, to avoid diluting the reformist vote.“Mr. Khatami was offended and felt betrayed,” Mr. Leylaz said.

Mr. Khatami, 65, won a landslide victory in 1997 and was in office for two terms until 2005. A charismatic leader, he was expected to draw considerable support in the coming election. More than 20,000 supporters showed up at his speech last week in the southern city of Shiraz, despite government restrictions.

Mr. Moussavi was the country’s prime minister from 1980 to 1988. He is well remembered by many Iranians for managing the country during its eight-year war with Iraq. His presidential platform is not yet clear, but in the past he supported protectionist economic policies.

Mr. Ahmadinejad is supported by the conservative Iranian establishment, but his economic policies have unleashed inflation of over 25 percent, and two major setbacks last week suggested that he might be losing support ahead of elections.

Last week, Parliament rejected a major element of his proposed budget to cut energy subsidies and to distribute the money directly among the poor.

"I announce my withdrawal from the 10th presidential election," Mr Khatami said in a statement released after a late-evening meeting with his supporters and campaign officials.

he entered this campaign reluctantly and unenthusiastically, adds our correspondent, and it soon became clear that many of those in power in Iran did not want him to return as president. One city prevented him from campaigning with the excuse that it would cause traffic jams.

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.

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.

Javier Solana, foreign policy chief for the European Union, said in Brussels on Monday that the group would reconsider its relationship with Israel if it did not remain committed to establishing a Palestinian state.

Mr. Lieberman also has few fans in Egypt, which has acted as an intermediary for Israel in several matters. Some months ago Mr. Lieberman complained that President Hosni Mubarak of Egypt had not agreed to come to Israel. “If he doesn’t want to, he can go to hell,” he added.“Imagine that Hossein Mousavi wins the Iranian presidency this spring and he names Mohammad Khatami as his foreign minister,” said Meir Javedanfar, an Iran analyst in Israel, referring to two Iranian leaders widely viewed as in the pragmatist camp. “With Lieberman as foreign minister here, Israel will have a much harder time demonstrating to the world that Iran is the destabilizing factor in the region.”

Secretary of State Hillary Rodham Clinton has already criticized Israeli plans to demolish Palestinian homes in East Jerusalem, and her department has criticized Israel’s banning of certain goods from Gaza.This represents a distinct shift in tone from the Bush era. An internal Israeli Foreign Ministry report during the Gaza war noted that compared with others in the United States, “liberals and Democrats show far less enthusiasm for Israel and its leadership.”

Some Israeli officials say they believe that what the country needs is to “rebrand” itself. They say Israel spends far too much time defending actions against its enemies. By doing so, they say, the narrative is always about conflict.“When we show Sderot, others also see Gaza,” said Ido Aharoni, manager of a rebranding team at the Foreign Ministry. “Everything is twinned when seen through the conflict. The country needs to position itself as an attractive personality, to make outsiders see it in all its reality. Instead, we are focusing on crisis management. And that is never going to get us where we need to go over the long term.” Mr. Gilboa, the political scientist, said branding was not enough. “We need to do much more to educate the world about our situation,” he said. Regarding the extra $2 million budgeted for this, he said: “We need 50 million. We need 100 million.”

Fars, a semiofficial news agency, reported the confession of a Newsweek reporter, Mazaiar Bahari, that he had done the bidding of foreign governments, as well as a confession by the editor of a newspaper run by Mir Hussein Moussavi, the opposition leader. And at Friday Prayer, Ayatollah Ahmad Jannati said the government planned to put on trial several Iranian employees of the British Embassy — after confessions were extracted.

In addition to Mr. Abtahi, other prominent reformers being held include Abdullah Ramezanzadeh, Mr. Khatami’s spokesman, and Mostafa Tajzadeh, a former deputy interior minister.

Karoubi's Etemad-e Melli website said on Saturday he had visited families of some of the many people detained after the election, including former vice president Mohammad Ali Abtahi, who was part of his campaign and was arrested on June 16. "The recent detainees were not opponents of the system. They are members of the establishment who had some complaints against the result of the election," Karoubi said.

Iran's police chief, Ismail Ahmadi-Moghaddam, on Wednesday put the total number of detainees in connection with the unrest at 1,032 and said most had been freed. The rest had been "referred to the public and revolutionary courts", he said.

The International Campaign for Human Rights in Iran said on Tuesday reports from within Iran indicated that as many as 2,000 people, including opposition leaders, professors, journalists, students and protesters may be in detention across the country.

On Monday, the National Security and Foreign Policy Commission of Parliament was scheduled to visit the holy city of Qum to meet with two grand ayatollahs. A day earlier it met with two former presidents, Mohammad Khatami and Ali Akbar Hashemi Rafsanjani, in an effort to ease the strains that have developed since the June 12 election. The speaker of Parliament, Ali Larijani, a former nuclear negotiator, has emerged as a powerful opponent of Mr. Ahmadinejad.

Earlier in the day, apparently in an attempt to create a semblance of fairness, state television said the Guardian Council had begun a random recount of 10 percent of the ballots in Tehran’s 22 electoral districts and in some provinces.

The nation’s intelligence chief charged that the protests were inspired by Western and “Zionist” forces, and Mr. Ahmadinejad called Monday for an investigation into the shooting of Neda Agha-Soltan, the young protester who became a symbol when a video of her dying moments in the streets was seen all over the world. Witnesses said she was shot by a member of the Basij, the government militia. But now the government is pressing an account that foreigners killed her to undermine its credibility.

On Sunday, the authorities arrested nine Iranian staff members of the British Embassy in Tehran, and while five had been released Monday, four remained in custody for what the intelligence service said were efforts to incite and organize the protests.But as the arrests ratcheted tensions up between Iran and the European Union, Iran’s Foreign Ministry spokesman tried to ease back on Monday, however slightly. “Reduction of ties is not on our agenda with any European country, including Britain,” the spokesman, Hassan Qashqavi, said.

Iran’s economy, even before the electoral crisis, was suffering from the drop in oil prices, with inflation of at least 15 percent — and by some estimates 25 percent — and damaging unemployment. On Sunday, the government announced that it had to end all subsidies for gasoline used by private vehicles, a decision that was expected, but given the timing, suggested serious strains to the state budget. Antagonizing the European Union, Iran’s largest trading partner, could do further damage.

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.

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.

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.

Mr Ahmadinejad is due to hold a news conference on Sunday before attending what is expected to be a huge victory rally. In a TV address on Saturday, he condemned the outside world for "psychological warfare" against Iranians during the election, which he called "totally free and fair". "This is a great victory at a time and condition when the whole material, political and propaganda facilities outside of Iran and sometimes... inside Iran, were totally mobilised against our people," he said.

The streets of the Iranian capital were reported to be calm on Sunday morning, but concrete barriers are being erected in the city centre.

Senior Iranian political figures have offered their backing to Mr Ahmadinejad, among them parliamentary Speaker Ali Larijani and the head of the judiciary.

The president already has the backing of the country's Supreme Leader, Ayatollah Ali Khamenei, who endorsed his election win on Saturday.

World reaction has been muted, with major powers slow to welcome the Iranian result. The European Union and Canada have voiced concern about allegations of irregularities, while US Secretary of State Hillary Clinton said only that Washington hoped the result reflected the "genuine will and desire" of Iranians. Long-time allies such as Venezuela and Syria, as well as neighbours Iraq and Afghanistan, are among those who have recognised Mr Ahmadinejad as the winner.

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.

I have heard that my friends Mostafa Tajzadeh and Abdallah Ramezanzadeh have been tortured. Ramezanzadeh was the spokesman of President Mohammad Khatami and Tajzadeh his deputy interior minister.

"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.

The 1979 revolution expropriated the assets of foreign investors and the nation's wealthiest families; oil had long been nationalized, but the mullahs seized virtually everything else of value--banks, hotels, car and chemical companies, makers of drugs and consumer goods. What distinguishes Iran is that many of these assets were given to Islamic charitable foundations, controlled by the clerics. According to businessmen and former foundation executives, the charities now serve as slush funds for the mullahs and their supporters.

Dozens of interviews with businessmen, merchants, economists and former ministers and other top government officials reveal a picture of a dictatorship run by a shadow government that--the U.S. State Department suspects--finances terrorist groups abroad through a shadow foreign policy. Its economy is dominated by shadow business empires and its power is protected by a shadow army of enforcers.

Ironically, the man most adept at manipulating this hidden power structure is one of Iran's best-known characters--Ali Akbar Hashemi Rafsanjani, who has been named an ayatollah, or religious leader. He was the speaker of parliament and Khomeini's right-hand man in the 1980s, president of Iran from 1989 to 1997 and is now chairman of the powerful Expediency Council, which resolves disputes between the clerical establishment and parliament. Rafsanjani has more or less run the Islamic Republic for the past 24 years.

He played it smart, aligning himself in the 1960s with factions led by Ayatollah Khomeini, then becoming the go-to guy after the revolution. A hard-liner ideologically, Rafsanjani nonetheless has a pragmatic streak. He convinced Khomeini to end the Iran-Iraq war and broke Iran's international isolation by establishing trade relations with the Soviet Union, China, Saudi Arabia and the United Arab Emirates. In the 1990s he restarted Iran's nuclear program. He is also the father of Iran's "privatization" program. During his presidency the stock market was revived, some government companies were sold to insiders, foreign trade was liberalized and the oil sector was opened up to private companies. Most of the good properties and contracts, say dissident members of Iran's Chamber of Commerce, ended up in the hands of mullahs, their associates and, not least, Rafsanjani's own family, who rose from modest origins as small-scale pistachio farmers.

State television earlier on Sunday said at least 10 people were killed during street clashes in downtown Tehran the previous day.

Iran's powerful Guardian Council said Sunday there were some irregularities in the June 12 presidential election, which has been widely disputed and triggered bloody street protests. The Guardian Council admitted that the number of votes collected in 50 cities was more than the number of eligible voters, the council's spokesman Abbas-Ali Kadkhodaei told the Islamic Republic of Iran Broadcasting (IRIB) channel.

He said this amounted to about 3 million questionable votes, but added that "it has yet to be determined whether the amount is decisive in the election results."

The authorities have branded the protesters as "terrorists" and rioters. Tehran's police commander Azizullah Rajabzadeh warned police would "confront all gatherings and unrest with all its strength," the official IRNA news agency reported.

In pro-Mousavi districts of northern Tehran, supporters took to the rooftops after dusk to chant their defiance, witnesses said, an echo of tactics used in the 1979 Islamic revolution. "I heard repeated shootings while people were chanting Allahu Akbar [God is great] in Niavaran area," said a witness, who asked not to be named.

Mohammad Khatami, a Mousavi ally and a moderate former president, warned of "dangerous consequences" if the people were prevented from expressing their demands in peaceful ways.

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.