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While President Mahmoud Ahmadinejad continues to make belligerent noises about Israel and the West, others in Tehran have hinted that they're ready for a change. In a Mar. 21 speech, Supreme Leader Ali Khamenei trotted out standard anti-American rhetoric but also indicated a willingness to talk. And Ahmadinejad's probable opponent in the June presidential election, former Prime Minister Mir Hossein Moussavi, favors negotiations with the US. "Obama has prompted Iranians to have an open debate about the relationship they want to have with the US," says Gary Sick, an Iran specialist at Columbia University in New York. "This is something that hasn't been seen in 30 years."

Most Iranian executives seem to be rooting for Moussavi. Although he is an old-guard leftist, businesspeople hope he would lead a reform-minded administration that could ease Iran's isolation. "Ahmadinejad has done serious damage to Iran's reputation and the reputation of Iranian business," says Mohammad Reza Behzadian, a former head of the Tehran Chamber of Commerce who runs Tondar Middle East, a trading company in Tehran.

Facing pressure from Washington, major European banks have stopped doing business in the country. So Iranians must pay exorbitant rates for trade financing from second- and third-tier banks in Europe, the Middle East, and Asia. Some Iranians work around the restrictions by setting up subsidiaries in the United Arab Emirates and playing cat-and-mouse with American inspectors. But such solutions are expensive, adding billions of dollars to Iran's soaring import bill-$57 billion for the year that ended in March. "It's a challenge finding banks that we can trust," says Parviz Aghili, CEO of Karafarin Bank in Tehran.

Sanctions also restrict the development of Iran's vital energy reserves. Tehran wants to boost oil production capacity by 25 percent, to 5 million barrels a day, but with little foreign help and aging fields in rapid decline, it's tough even to maintain current output. That's one reason Iranian oil officials are quick to say they want American help. "We don't have any problems with US investment," says M.A. Khatibi Tabatabaei, Iran's representative on OPEC's board of governors.

Ahmadinejad's erratic policies make things worse. The populist President has spent freely on everything from loans to small businesses of questionable viability to imported food and cash handouts for the poor. And he has pressured banks to shovel out easy credit, leading to a real estate boom. But worried that oil earnings will start to peter out, the central bank has tightened up, starving factories of capital and prompting a sharp fall in property prices.

Last year, when oil prices surged, the Iranian economy could shrug off its problems. With oil's steep decline and the global financial crunch, though, some fear social unrest. Many factories are months behind on salaries, says Ali Reza Mahjoub, a member of Parliament and head of Workers' House, a labor group. He estimates that unemployment, officially 12.5 oercent, is really closer to 17 oercent. As financing dries up, building is grinding to a halt, says developer Amir-Mohamad Mazaheri. "This is a very dangerous situation," he says, puffing on a cigarette in a new tower in North Tehran. "There will be 3-4 million construction workers looking to any activity to support themselves."

Even with sanctions in place, savvy foreigners have managed to make a mark in Iran-though it takes persistence. Renault, for instance, has a $200 million joint venture to build the Logan compact. But late payments from the Iranians and difficulties training enough suppliers to meet a requirement of 60 percent local content have slowed progress, Renault says. The venture, Renault Pars, has cut its output target for the Logan by 25 percent, to 150,000 cars per year. "You need a lot of time and energy," says Renault Pars chief Jean-Michel Kerebel. "What takes five hours in Europe could take five days here."

Iran is not simply a medium-sized regional power that can be ordered around at will. Ironically, America's disastrous war in Iraq has allowed its fierce adversaries in Tehran to benefit from a massive shift of power in the Middle East.

Before his ascent to the office of president, not even diplomats stationed in Tehran and familiar with all of the ins and outs of Iranian politics were familiar with this short man with the sparse beard and piercing eyes. The fiery revolutionary, hardworking to the point of exhaustion and filled with contempt for earthly wealth, rose to power from humble beginnings and became the hope of all "Mostasafin," the disenfranchised millions without whom the Islamic Republic probably would not exist today and for whom Ahmadinejad has fashioned himself into an Iranian Robin Hood.

This places the Americans before the virtually impossible task of joining forces with Iran to resolve the classic Middle East conflict and its 30-year conflict with Tehran itself. For this reason, the Iraq question is also becoming increasingly urgent for Washington.

Obama knows that the United States could derive substantial benefits from cooperation with Tehran. Without Iran, for example, it will be almost impossible to bring peace to Afghanistan in the long term. In Afghanistan and Pakistan -- the center of conflict that Washington describes in its new strategic concept as a single unit known as "AfPak" -- the Americans and Shiite Iran have many interests in common. Tehran's rulers battled the Sunni Taliban radicals, whom they have always seen as dangerous neighbors and ideological foes, before the Americans did.

And Tehran, with the world's second-largest natural gas reserves and its third-largest oil reserves, has the capacity to do a great deal of damage to the international economy -- or help it overcome the global economic crisis.

Conversely, rapprochement with the United States and Europe would also bring enormous benefits to the Iranians. Without know-how from the West, the country will hardly manage to achieve the modernization it needs so urgently. With inflation approaching 30 percent and real unemployment exceeding 20 percent (12 percent, according to official figures), and more than a million drug addicts -- a distressing world record of addiction -- the country faces practically insurmountable problems.

Whether the internally divided Palestinians will manage to come to terms and form a unified government for the Gaza Strip and the West Bank is no longer in the hands of the inconsequential negotiators in Cairo, but will be decided instead by Hamas's patrons in Tehran. Tehran also decides whether the Lebanese Hezbollah or Hamas's extremists use primarily words to express their hostility toward Israel or, as is currently the case, resume their bloody terrorist attacks instead.

Ahmadinejad feels obligated to the permanently downtrodden members of society. As if he were one of them, he campaigned for president four years ago in Tehran's massive poor neighborhoods, traveled to the country's most remote places and promised the underprivileged their share of Iran's riches. He told them that he would fill their empty plates with the proceeds from the sale of oil, and that he would declare war on corruption and nepotism. The "era of oppression, hegemonic regimes, tyranny and injustice has reached its end," Ahmadinejad told supporters after his election.

But the political achievements of President Ahmadinejad have been more miserable than stellar. In addition to isolating his country even further in the world, he has ruined its economy with his chaotic economic policies. In the devastating assessment of Ali Larijani, the president of the Iranian parliament and Ahmadinejad's biggest domestic rival, whom he previously removed from his position as Iran's chief nuclear negotiator with the West: "The confusion is the result of the government arbitrarily dissolving offices and dismissing experts, ignoring parliamentary resolutions and stubbornly going its own way."

Nevertheless, it is quite possible that this man, who has probably done more damage to his country than any other president in the 30-year history of the Islamic Republic, will enter a second term this summer -- simply because he lacks a convincing and courageous opponent.

Moussavi is of a significantly more robust nature than Khatami. As prime minister during the years of the Iraq war, he successfully managed the country's wartime economy. Critics note, however, that Moussavi's tenure was marked by a sharp rise in arrests and repression. He has not held any public office in 20 years and is virtually unknown among younger Iranians, who make up about 60 percent of the population.

On the surface, the elegant Moussavi would undoubtedly represent Iran more effectively on the international stage than Ahmadinejad. He appears to be more open to negotiations with the Americans. And yet, when it comes to the central nuclear conflict, the new candidate is just as obstinate as the current president. At a press conference in Tehran just last Monday, he noted that he too would not back down on the issue.

Which candidate the powerful religious leader Khamenei ends up supporting will likely be the decisive question. When Ahmadinejad came into office, he kissed Khamenei's hand. The two men were long considered extremely close ideologically, although since then Khamenei has more or less openly criticized Ahmadinejad's economic policies. Only recently, however, the religious leader spoke so positively about the president that many interpreted his words as an endorsement of his candidacy. Many observers of Iranian politics believe Ahmadinejad, because of his lasting popularity in rural areas, will be elected to a second term.

There are no questions that the Iranian president does not answer with questions of his own. He insists, most of all, on a few core concepts. One of them is justice, but he defines what justice is. Another is respect. He claims that he and his country are not afforded sufficient respect. This desire for recognition seems almost insatiable.

In Ahmadinejad's view, "hagh chordan," or the act of trampling on the rights of the Iranians, is a pattern that constantly repeats itself and comes from all sides, leading to a potentially dangerous mix of a superiority and an inferiority complex -- but not the irrationality of which the president is so often accused, especially by the Israelis.

The U.S. Congress is debating legislation that would require the White House to sanction companies exporting refined petroleum products to Iran. Tehran imports roughly 40% of its gasoline despite having some of the largest energy supplies in the world.

The target also comes about ten weeks after the Iranian presidential election June 12, giving the U.S. some time to gauge the new Tehran administration. Current Iranian President Mahmoud Ahmadinejad, who is running for re-election, has at times publicly welcomed Mr. Obama's call for negotiations on the nuclear question. But Tehran continues to expand the number of centrifuges enriching uranium at its Natanz facility.

U.S. and European diplomats believe that hard-line elements inside Iran's political establishment used the Saberi case in a bid to sabotage any rapprochement with Washington.

All Iran's presidential candidates have said they will not abandon enriching uranium, but Tehran political insiders with knowledge of the talks say Iran could agree to a short-term "freeze for freeze" formula. Iran would then offer that Western powers can freely monitor Iran's program to ensure it is not turning military -- in return for sharing technology and expertise.

"The Americans will have to accept this offer, they have no choice," said Sadegh Kharazi, a former deputy foreign minister who remains involved in Iran's foreign policy. "Iran will not back down. From now on, let's all talk about how to form partnerships so it benefits both parties."

The benchmarks the U.S. and its allies are establishing also include signs Tehran will be willing to rein in its support for militant groups in the region.

Israel and key Arab allies have voiced concerns about the usefulness of diplomacy with Iran. The U.S. point man on Iran policy, Dennis Ross, was greeted with skepticism from Arab allies during a tour this month through Egypt and the Persian Gulf countries, said U.S. officials. Saudi Arabia and the United Arab Emirates., in particular, have expressed alarm over Iran's nuclear activities and its moves to support militant groups operating in Lebanon, Iraq and the Palestinian territories.

Israel believes Tehran could be far enough advanced in its nuclear work by early next year to make protracted negotiations moot. Last week, Brig Gen. Michael Herzog, chief of staff to Israel's defense minister, publicly called at a conference in Washington for the Obama administration to set clear timetables and benchmarks for its Iran diplomacy. He reiterated statements by new Israeli Prime Minister Benjamin Netanyahu's government that Jerusalem might take military action against Iran to end its nuclear threat. "When we say a nuclear Iran is unacceptable, we mean it," Mr. Herzog said. "When we say all options are on the table, we mean it."

As the row with Britain continued, Iran's guardian council, the country's top legislative body, confirmed Mahmoud Ahmadinejad's victory in the disputed poll after a partial recount, finally dashing hopes of a different outcome.

Iran's foreign ministry had earlier appeared to respond to the warning by saying it did not wish to damage or downgrade relations with the UK, after a telephone conversation yesterday between David Miliband, the foreign secretary, and his Iranian counterpart, Manuchehr Mottaki. Miliband had demanded the immediate release of the embassy staff.But the fear in London is that the foreign ministry is not in control, with regime hardliners from the interior ministry and intelligence service calling the shots as part of a campaign to pin the blame for the unrest on foreign governments.

there was no response to a report that ministry employees were instructed to rig the election results on the basis of a fatwa – religious edict – from a pro-Ahmadinejad ayatollah.

According to the Tehran Bureau website, the unnamed cleric is said to have stated: "If someone is elected president and hurts the Islamic values that have been spread [by Ahmadinejad] to Lebanon, Palestine, Venezuela and other places, it is against Islam to vote for that person. We should not vote for that person, and also warn people about that person. It is your religious duty as the supervisors of the elections to do so."

Two pro-reform figures, newspaper editor Saeed Laylaz and Hamid Reza Jalaipour, an activist and journalist, were arrested on Wednesday morning, reports said.

About 100 reformist figures were arrested on Sunday as opposition grew to the election results. Many have since been released.

Overnight, members of Iran's Basij volunteer militia reportedly raided university dormitories in several Iranian cities. The Basij stormed compounds, ransacking dormitories and beating up some students. Several arrests were made, our correspondent says, and the dean of the university in the city of Shiraz has resigned.

In the most high-profile incident, 120 lecturers at Tehran university resigned after a raid on that institution.

Ayatollah Khamenei has not appeared in public since the election results, but now seems to be deeply involved in the search for a solution to the stand-off. Meeting representatives of the four election candidates, he urged all parties not to agitate their supporters and stir up an already tense situation. He also repeated his offer of a partial vote recount, a proposal already rejected by the main opposition. "In the elections, voters had different tendencies, but they equally believe in the ruling system and support the Islamic Republic," the Associated Press reported him as saying. "Nobody should take any action that would create tension, and all have to explicitly say they are against tension and riots."

Witnesses said Tuesday's demonstrators walked in near silence towards state TV headquarters - apparently anxious not to be depicted as hooligans by authorities. Thousands of President Mahmoud Ahmadinejad's supporters staged a counter-rally in Vali Asr Square in central Tehran - some bussed in from the provinces, observers say.

As night fell, residents took to the roof-tops of their houses to shout protest messages across the city, a scene not witnessed since the final days of the Shah, our correspondent says.

Rights activists have said some 2,000 people detained after the June vote may still be held across Iran, including leading reformers, academics, journalists and students.

Other charities resemble multinational conglomerates. The Mostazafan & Jambazan Foundation (Foundation for the Oppressed and War Invalids) is the second-largest commercial enterprise in the country, behind the state-owned National Iranian Oil Co. Until recently it was run by a man named Mohsen Rafiqdoost. The son of a vegetable-and-fruit merchant at the Tehran bazaar, Rafiqdoost got his big break in 1979, when he was chosen to drive Ayatollah Khomeini from the airport after his triumphal return from exile in Paris.

Khomeini made him Minister of the Revolutionary Guards to quash internal dissent and smuggle in weapons for the Iran-Iraq war. In 1989, when Rafsanjani became president, Rafiqdoost gained control of the Mostazafan Foundation, which employs up to 400,000 workers and has assets that in all probability exceed $10 billion. Among its holdings: the former Hyatt and Hilton hotels in Tehran; the highly successful Zam-Zam soft drink company (once Pepsi); an international shipping line; companies producing oil products and cement; swaths of farmland and urban real estate.

A picture emerges from one Iranian businessman who used to handle the foreign trade deals for one of the big foundations. Organizations like the Mostazafan serve as giant cash boxes, he says, to pay off supporters of the mullahs, whether they're thousands of peasants bused in to attend religious demonstrations in Tehran or Hezbollah thugs who beat up students. And, not least, the foundations serve as cash cows for their managers.

Today Rafiqdoost heads up the Noor Foundation, which owns apartment blocks and makes an estimated $200 million importing pharmaceuticals, sugar and construction materials. He is quick to downplay his personal wealth. "I am just a normal person, with normal wealth," he says. Then, striking a Napoleonic pose, he adds: "But if Islam is threatened, I will become big again."

"It has been confirmed that those behind the terrorist act in Zahedan were hired by America and the arrogance's other hands," Sayyah told the semi-official Fars News Agency.

A bomb attack in Zahedan in early 2007 which killed 18 Revolutionary Guards was claimed by Jundollah (God's Soldiers), an insurgent group that says it is fighting for the rights of Iran's Sunni minority but which Tehran says is part of al Qaeda.

Defense analyst Paul Beaver said it was "highly unlikely" that the U.S. administration of President Barack Obama, who is seeking to engage Tehran diplomatically after three decades of mutual mistrust, would support Sunni insurgents in Iran.

In April, Iran's intelligence minister said it had arrested a group of people linked to Israel who were planning bombings ahead of the June 12 election, in which hardline President Mahmoud Ahmadinejad is seeking a second four-year term.

The explosion, which some officials and media suggested was a suicide bombing, took place on a religious holiday in the mainly Shi'ite Muslim country. More than 80 people were wounded.

"The terrorists, who were equipped by America in one of our neighboring countries, carried out this criminal act in their efforts to create religious conflict and fear and to influence the presidential election," Sayyah told state radio.

In a letter to Khamenei, published by the semi-official Mehr news agency, Rafsanjani said tens of millions of Iranians had witnessed "mis-statements and fabrications" during the debate."I am expecting you to resolve this position in order to extinguish the fire, whose smoke can be seen in the atmosphere, and to foil dangerous plots to take action," said Rafsanjani.

His comments were echoed by 14 high-ranking clerics from the holy city of Qom, who expressed "deep concern and regret" that Iran's image had been harmed in the debate."Accusing those who were not present at that debate and could not defend themselves is against our religion," they said in a statement also published by Mehr.

Meanwhile, central Tehran saw chaotic scenes for a second day when supporters of Mousavi – many of them young women – flocked in their tens of thousands to another demonstration, shouting anti-Ahmadinejad slogans and waving the green ribbons, banners and posters that have become the symbol of his campaign. A "human chain" rally on Monday night was likened by many to the events that shook Tehran before the 1979 Islamic revolution.

Previous Mousavi rallies had to be cancelled at the last minute because permission to use large venues was suddenly withdrawn by the authorities. On Sunday a rally at Karaj outside Tehran could not be held because the electricity supply to the public address system failed.

Last night, in the last of six televised debates, Ahmadinejad clashed over the economy with the other conservative candidate, a former Revolutionary Guards commander, Mohsen Rezaei.Ahmadinejad insisted that over the last four years he had slashed inflation to 15%, but Rezaei, an economist, said the true figure was 25%.

The fourth candidate, reformist cleric Mehdi Karoubi, dismissed as "psychological warfare" rumours that he might withdraw from the race to boost Mousavi's chances.

Ahmadinejad remained defiant towards the outside world, especially over the nuclear issue that has done so much to isolate Iran.At a campaign event in the Caspian Sea province of Mazenderan he said: "Let the world know that if the Iranian nation should re-elect this small servant, he would go forward in the world arena with the nation's authority and would not withdraw an iota from the nation's rights."

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.

One opposition newspaper has been closed down and BBC websites also appear to have been blocked by the Iranian authorities.

Mr Mousavi was hoping to prevent Mr Ahmadinejad winning more than 50% of the vote, in order to force a run-off election. However, Interior Minister Sadeq Mahsouli said his share of the vote was just under 34%.

The former prime minister dismissed the election result as deeply flawed. "I personally strongly protest the many obvious violations and I'm warning I will not surrender to this dangerous charade," the Reuters news agency reported him as saying.

"The result of such performance by some officials will jeopardise the pillars of the Islamic Republic and will establish tyranny."

Mr Mousavi has already said there was a shortage of ballot papers and alleged that millions of people had been denied the right to vote.

The head of the Committee to Protect the People's Votes, a group set up by all three opposition candidates, said the group would not accept the result, alleging fraud. They have asked Iran's Guardian Council - a powerful body controlled by conservative clerics - to cancel the results and re-run the elections. A second opposition candidate, Mehdi Karroubi, declared the results "illegitimate and unacceptable".

The figures, if they are to be believed, show Mr Ahmadinejad winning strongly even in the heartland of Mr Mousavi, the main opposition contender.

By Saturday morning, with the opposition angry at the formal results, police in Tehran moved to prevent protests even though there were few signs of organised dissent.

There were long queues at polling stations, with turnout said to be higher than 80%.

Iran is ruled under a system known as Velayat-e Faqih, or "Rule by the Supreme Jurist", who is currently Ayatollah Ali Khamenei.

He adds that this is the worst public violence in Tehran since the Islamic revolution 30 years ago, with protesters chasing away secret policemen who were infiltrating the crowds.

Some followers of Mousavi had called for a boycott of prayers at the university because of the refusal to annul the result of the poll, but TV pictures showed thousands of people listening to Khamenei and occasionally chanting affirmation of his words.

The speech now creates a clear dilemma for Mousavi and his supporters: do they return to the streets in open defiance of Khamenei or drop their demands? Prior to today's speech, Mousavi had called on the opposition movement to gather in Tehran tomorrow afternoon for a rally, but many may now feel too fearful of a crackdown by the authorities.

Ahmadinejad and his cabinet ministers attended the prayers, as did the parliamentary speaker, Ali Larijani, the mayor of Tehran, Mohammad Baqer Qalibaf, and senior military officers from the revolutionary guards. Many of those in the audience appeared to be government employees or members of the president's militia.

The episode demonstrates the extent to which the administration views social networking as a new arrow in its diplomatic quiver. Secretary of State Hillary Rodham Clinton talks regularly about the power of e-diplomacy, particularly in places where the mass media are repressed.

There were also suspicions that some pro-government forces might be using new-media outlets to send out misinformation. One popular opposition site, Persiankiwi, warned its followers on Tuesday to ignore instructions from people with no record of reliable posts.

Mr. Cohen, a Stanford University graduate who is the youngest member of the State Department’s policy planning staff, has been working with Twitter, YouTube, Facebook and other services to harness their reach for diplomatic initiatives in Iraq and elsewhere.

Tehran has been buzzing with tweets, the posts of Twitter subscribers, sharing news on rallies, police crackdowns on protesters, and analysis of how the White House is responding to the drama.With the authorities blocking text-messaging on cellphones, Twitter has become a handy alternative for information-hungry Iranians. While Iran has also tried to block Twitter posts, Iranians are skilled at using proxy sites or other methods to circumvent the official barriers.

Last month, he organized a visit to Baghdad by Mr. Dorsey and other executives from Silicon Valley and New York’s equivalent, Silicon Alley. They met with Iraq’s deputy prime minister to discuss how to rebuild the country’s information network and to sell the virtues of Twitter.

In addition to Twitter, YouTube has been a critical tool to spread videos from Iran when traditional media outlets have had difficulty filming the protests or the ensuing crackdown. One YouTube account, bearing the user name “wwwiranbefreecom,” showed disturbing images of police officers beating people in the streets. On Monday, Lara Setrakian, an ABC News journalist, put out a call for video on Twitter, writing, “Please send footage we can’t reach!”

Journalists were told on Tuesday that they could not cover protests without permission. The restrictions “effectively confine journalists to their offices,” a spokesman for the BBC said.

In the first official ­confirmation, state radio also reported that seven people had been killed at the end of Monday when state militia appeared to open fire on demonstrators bent on breaking into a building.It was feared this rally of Ahmadinejad supporters would result in further deadly clashes between ordinary ­Iranians. But violence was avoided, to begin with at least, after the Mousavi campaign rescheduled its mass meeting to a northern district of Tehran and an hour later.

Iran's Revolutionary Guards stand to be the biggest losers if the S300 system doesn't come through, since there will be little they can do but watch the bombs fall if Western powers attack. Though Russia delivered a smaller Tor-M1 missile defense system to the Iranians last year, it's a localized weapon. The S300 system, according to Jane's Defence Weekly, is "one of the world's most effective all-altitude regional air defense systems, comparable in performance to the U.S. MIM-104 Patriot system." The latest version of the S300PMU2 Favorit has a range of up to 195 kilometers and can intercept aircraft and ballistic missiles at altitudes from 10 meters to 27 kilometers. Though it's hardly clear the S300 will pose a problem for the Israeli or U.S. air forces. The Israelis have trained in avoidance tactics on an S300 system bought by Greece and deployed on the island of Crete; the U.S. Air Force has its own S300 system, which is now deployed for training purposes in the United States. According to one senior Air Combat Command source in Washington, the U.S. Air Force has the S300 "covered."

Regardless of the system's effectiveness, delivery of the S300 will be a key bellwether of Russian relations with the West. Moscow has much less influence over Tehran than it likes to pretend when bargaining with the U.S., and the S300 is one of its few remaining chips.

For years, Russia used construction of the Bushehr reactor by the Russian nuclear company Atomenergoprom as a key element of leverage, shutting down work on the plant for long periods. But now that Atomenergoprom has completed construction and is training the Iranian staff to run it, that leverage has gone. Though Russian staff will remain on-site at Bushehr, the Iranians can now run it on their own.

Russians may have less pull with Teheran than it claims, but it still sees Iran-U.S. enmity as a strategic goal, both because it increases their own diplomatic leverage and because it keeps oil prices high. Furthermore, Russia has been trying to make itself a rallying point for anti-U.S. regimes from Venezuela to Syria and Iran in an effort to restore its status as a world strategic player—a retread of the Cold War model of forging alliances with any Third World dictator who would take Russian money. So while Russia doesn't want Iran to get nukes and historically fears Iranian influence in Central Asia, Moscow has little interest in helping a rapprochement between Iran and the West. Meanwhile, the Kremlin is, cannily or cynically, depending on one's point of view, keeping the S300s on the table, neither committing to scrapping the deal nor delivering the equipment—and reserving the right to continue to tack between Jerusalem and Tehran as self-interest dictates.