The government is playing hardball with the rest of the world over the issue of their nuclear weapons program. Attempts to impose economic sanctions, or military attack, on Iran would, the government now threatens, result in Iran withholding its oil. Iran is selling about $40 billion worth of oil a year. If Iran's oil were pulled from the market, the cost of oil would probably rise 20-50 percent. Iran believes this would hurt the rest of the world, than it would Iran (which would still have its unshipped oil). The rising price of oil over the last few years has enabled Iran to create a reserve of some $50 billion. Iran also knows that embargos don't work, and a determined government, especially if they have a lot of money, can find ways around it.
The basic situation in Iran is that the Islamic conservative minority (about 20 percent of the population) benefits from a constitution that gives the senior clergy a veto over government actions. The Islamic conservatives control the police and military, and maintain their own separate army of armed men, to protect that control. The majority of Iranians are not willing to fight a civil war to break the Islamic conservative control. That control was obtained during the 1980s, after Iraq invaded Iran (hoping to grab some oil wells while Iran was distracted with overthrowing the monarchy.) In all the chaos of that war, the Islamic conservatives got the new constitution modified to favor themselves. The Islamic conservatives are now using nationalism ("Iran must have nukes!") to help maintain power, and popular support for the nuclear weapons program. But the Iranian clergy also supports world conquest by Islam, the destruction of Israel and the United States, and terrorism in general. Thus they are seen as far more dangerous with nukes. However, the Iranian terrorists are Shia Moslems, a minority that has long fought conservatives of the majority Sunni sect. Al Qaeda is a very conservative (and anti-Shia) Sunni terrorist group. Thus the spread of Iranian based terrorism is limited. The most tangible manifestation of Iranian supported terrorism is Hizbollah, a Lebanese Shia terror group that defends the large Shia minority in Lebanon, and supports the destruction of Israel (whose Moslem population is nearly all Sunni.) Meanwhile, al Qaeda is trying to establish a presence in Lebanon, which would eventually lead to renewed war between Shia and Sunni Lebanese.
Israel says it has clear evidence that Iran and Syria were behind yesterday's suicide bombing inside Israel. Syria has long been an ally of Iran, mainly because Syria is run by a Shia minority that needs an ally to help protect it from Sunni neighbors (particularly Iraq under Saddam.)
January 19, 2006: Baluchi rebels in the southeast say they have killed another captured soldier, and will kill more of their remaining seven captives unless the government released sixteen Baluchis that had been arrested for being connected with the rebels. The Baluchis are Sunni, and complain of religious and ethnic discrimination by the majority Iranians.
January 18, 2006: The government is increasing its controls over Internet use within the country. Filtering of content and shutting down sites is becoming more common and extensive.