Western nations have told Russia and China that if they arm Iran with modern weapons, there will be consequences. China has an incentive to back off here, because a stronger Iran threatens China's oil supplies. Russia, however, would benefit by Iranian attempts to shut down oil shipments from the Gulf (if only temporarily, to make a political point), as the price of oil would shoot up, to the benefit of Russian oil sales. Russia is currently holding back on the sale of nearly a billion dollars worth of S-300 anti-aircraft missiles to Iran. Russia has been holding off on this deal for several years, squeezing more and more favors and concessions out of the West. Iran is not happy about not getting its missiles, but Iran doesn't have the clout to force the sale to happen.
While Iran supports lots of terrorism, it doesn't let Iranian operatives get their hands dirty too often. Iran does spend a lot of money on incitement. Western efforts to halt Iranian subsidized hate (of the West, Jews, Israel, non-Shia Moslems, etc) broadcasts, is concentrating on Iranian sponsored hate satellite broadcasts (by TV networks al Manar and al Aqsa). This is hard core stuff, encouraging children to hate non-Moslems and become suicide bombers. Western nations have gotten Iranian sponsored hate cable off most satellite broadcast systems, but French and Arab satellite owners still take the money and broadcast the hate to Moslems in the West. Meanwhile, Iran is having an even bigger problem keeping Western entertainment out of Iran. With so many young Iranians learning English, DVDs or satellite broadcasts of American TV shows are very popular. This sort of entertainment is forbidden in Iran, but it cannot be stopped.
Iran practices the intolerance and hate that it preaches. Recently, Sufi (a mystical Moslem sect) religious shrines were destroyed. More Bahai (a new religion, with Moslem roots, that emerged in Iran in the 19th century) are being arrested and accused of spying for Israel, or whatever. Sunni Moslems continue to be persecuted, as they have been for over 500 years. The government has been more actively violent against anyone who does not practice the state approved Shia version of Islam. This is supposed to distract Iranians from how badly the government is running the economy.
The UN admits that it has not, and cannot, stop Iran from developing nuclear weapons. However, UN officials believe they are slowing Iran down a bit.
Iran is negotiating a deal to export natural gas, via a pipeline, to Bahrain. These talks were halted after an Iranian politician reminded everyone that he, like many Iranians, considered Bahrain the 14th province of Iran. That's because, well, it isn't called the "Persian" Gulf for nothing (although since all the oil money showed up, the Arabs have been trying to popularize the term "Arabian Gulf," with mixed success). There have been ethnic Iranian communities on Bahrain for centuries, and Iran had a formal claim on the island until 1969 (when the claim was dropped, in order to improve relations with Arab neighbors). Iran has always been an empire, and still is (only half the population is ethnic Iranian). The way this works, you always have a sense of "Greater Iran" which includes, at the least, claims on any nearby areas containing ethnic Iranians. Hitler used this concept to guide his strategy during World War II.
There are about 400,000 Iranians living in Los Angeles, California. Could that be the 15th province? Probably not, but Bahrain got very upset when these claims were revived. The Iranian government officially denounced such claims, but apparently many Iranians have not forgotten. Arabs are not very happy about that, and have responded by pointing out that Iran was Sunni until 500 years ago, and was forced to convert, on pain of death, by a Shia emperor (who killed about a million of his subjects in the process.) Saudi Arabia is trying, with some success, to organize Arab resistance to Iranian expansionist moves. Iran has responded by encouraging the Shia minorities on the west side of the Gulf to demonstrate their unhappiness with their minority status.
Less conservative candidates like former president (with 80 percent of the vote) Mohammed Khatami are running for president again, against incumbent conservative Mahmoud Ahmadinejad. The vote is in June, and the campaign is expected to get ugly. Already, the state Internet control department has been blocking Iranian access to pro-Khatami foreign web sites.
Iran has officially admitted what everyone already knew, that Iranian ballistic missiles could hit Israeli nuclear weapons sites. This is one reason Israel has developed an anti-missile missile system. Iran does not have such a capability, but is trying to buy one (advanced versions of the S-300 system) from Russia.
American efforts to negotiate anything with Iran eventually stumble over Iranian refusal to change its policy of seeking world domination for the Shia form of Islam. This desire to rule the world, in God's Name, underlies all that the current Iranian government does. Beyond that, Iran has been top dog in the region for thousands of years. Most Iranians can relate to that. The last few centuries have been rough, with the Turks throwing Iran out of what is now Iraq, and the Europeans destroying the lucrative Silk Road (between the Middle East and China) with their cheaper (to move goods to and from China) tall ships and other new technologies. Iran would like to make a comeback. Having nukes to back up those ambitions would be a big help.
Morocco has cut its diplomatic ties with Iran, over Iranian claims that Bahrain was a lost 14th province of Iran. Meanwhile, a free-trade agreement has been signed with Serbia, to increase trade between the two countries. Serbia has always been hospitable to Iranian weapons and technology smuggling operations, and this new agreement will only reinforce that.
Iran has moved three more brigades of troops to the Pakistani border. This reinforces the half million troops already manning the borders with Pakistan and Afghanistan. The enemy here is drug smugglers and Sunni terrorists. The Iranian Sunnis have long been persecuted. There are, for example, no legal Sunni mosques in Iran. Most Iranian Sunnis (there are a million or so of them) keep their heads down. But those belonging to the Baluchi tribes along the Pakistani border, have been increasingly violent. That includes kidnapping or killing Iranian police and border guards. Now, apparently, Iran plans to get really rough with the Baluchi tribes.
February 25, 2009: The first Iranian nuclear plant went live, for testing purposes. The testing will go on for up to six months, then the plant will plug into the electrical grid and begin producing power.
February 22, 2009: British officials revealed that Iranian diplomats had offered to halt support for terrorist attacks on British troops in Iraq, if Britain stopped pressuring Iran to halt its nuclear weapons program. Such deals have been hinted at in talks with Americans, but the Iranians know that the U.S. is much stricter about not making deals with terrorists. Europeans are more open minded in that regard.
February 18, 2009: A bomb went off in a Shia mosque in the east, near the Pakistani border. No one was injured. Sunni terrorists were suspected.