The government has given control over most of the navy to the more politically reliable Revolutionary Guard. The navy (and the rest of the armed forces) recently held a weeklong "defense exercise" to see how well prepared the armed forces were to resist an attack on Iranian nuclear weapons facilities. This was another propaganda drill, because Iran has very weak air defense systems (no modern long range missile systems, no first rate jet interceptors). Iran's military leadership has also been ruined by decades of promotions given to the most politically reliable, not the most militarily competent. Decades of embargoes have prevented the purchase of new weapons and equipment. The Iranian armed forces are basically props for the state propaganda operation. Some foreign journalists believe the propaganda, but military professionals, especially those who have been able to see the Iranians up close, know that it's mostly for show. If it came to a fight, many of the Iranians would be brave, then they would be dead.
While the government is increasingly unpopular, they know that, as long as they can sell their oil, they can keep their Islamic police state functioning, and keep the clerics in power. The clerics believe that the world cannot do without their oil, and by selling much of it to China, Iran has "bought" a powerful ally in the UN (who can veto any serious sanctions) and on the world stage. The clerics may be under threat, but they are also confident and undeterred. They will get their nuclear weapons, and then start bullying their neighbors again. Iran will be a local superpower once more, and that will make the clerics more popular with most Iranians.
While Iran has not executed any of the eight pro-democracy demonstrators it has sentenced to death, it has executed 258 others (usually by hanging) so far this year. Most of these are common criminals, which includes drug dealers and smugglers. Last year 246 people were executed. The drug war on the Afghan border grows, each year, in intensity. As the Iranian Revolutionary Guards grow more numerous and vicious in their efforts to halt the flow of Afghan opium and heroin, the smugglers (who tend to be armed and ready to fight) innovate, and amp up their own violence. The drugs keep coming, and the number of Iranian drug addicts increases as well. This frightens many of Iran's leaders more than pro-democracy demonstrations, because an increasing number of children of the religious leadership are using drugs. So the problem gets about as personal as it can get.
While the government has made it too difficult for opposition groups to stage their own protest demonstrations, the opposition has become sufficiently popular and widespread to hijack official demonstrations. These are held several times a year, mainly for propaganda purposes. The next one is on December 7th ("Students Day"). Police officials have warned that there will be blood, and worse, if the opposition tries to take over this one (which they almost surely will, as the opposition movement is strongest among students.)
Nothing the resistance, to the religious dictatorship, the clerics have decided to cut off this opposition at the source. So the religious establishment is exercising more control over primary school education. This will not eliminate radical older students, but it will provide more brainwashed pro-government students. These kids are good as informants, or cannon fodder for street demonstrations. The Iranians have noted the success of the Palestinians in using heavy indoctrination on primary school and pre-school, kids, in reducing dissent and increasing the supply of fanatics for the cause (lots of suicide bomber volunteers, for example).
November 29, 2009: In response to UN criticism of Iranian nuclear fuel refining efforts, the government announced that it would build ten more nuclear fuel refining facilities, and greatly increase its capacity for producing nuclear fuel, or material for nuclear weapons. Iran is basically telling the UN to go screw itself, because Iran will not bow to any UN demands. Meanwhile, Russia changed its mind again, and now says it will complete the nuclear power plant it is building for Iran, as quickly as possible. Earlier this year, Russia said the plant would not come on line this year (and it probably still won't.) Russia and Iran have had several arguments over how the plant was being built, and Iran has withheld payments to Russia (which usually resulted in Russia halting work, followed by peace talks and the resumption of payments and work.)
November 27, 2009: China offered to back a UN censure measure against Iran, but nothing stronger. Iran is a major supplier of oil to China, and of growing importance as a trade partner.
November 25, 2009: The government has publicly threatened Russia with legal action if the long delayed S-300 anti-aircraft missile systems (bought two years ago) are not delivered immediately. Russia has been pressured (and given counteroffers) from the U.S. and Israel to not deliver the missile systems, which would complicate any air attacks on Iranian nuclear weapons facilities.
November 21, 2009: An Iranian warship, in the Gulf of Aden to help the anti-piracy patrol, has an encounter with a Yemeni coast guard patrol boat, that was called by Yemeni fishermen, when the Iranians insisted on boarding and searching. Some of the Yemeni fishermen were roughed up. Iran only has about half a dozen surface warships capable of operating off the south coast of Yemen, and two of them are there now. But Yemen believes the Iranian warships are really there to provide some protection for the Iranian smugglers who are bringing weapons in, from Iranian bases in Eritrea, for pro-Iranian Shia tribal rebels in northern Yemen. The Yemeni navy recently captured one of these weapons smuggling boats, and captured some of the Iranian agents who were aboard. Iran has sent warships to the Gulf of Aden, for short periods of time, for the last year. The Iranians have largely operated on their own, and limited cooperation with other warships on the anti-piracy patrol.
November 18, 2009: The government rejected a UN deal that would have Russia and France process Iran's uranium into power plant fuel. This would prevent Iran from processing the uranium further so that it was powerful enough for nuclear bombs.
November 17, 2009: Courts sentenced five more people to death for participating in the protests against the rigged elections last June. That makes eight protestors sentenced to death, and 81 to prison terms. This is meant to intimidate reform minded Iranians, but the demonstrations and unrest continue.