Western efforts, led by the U.S., to make sanctions work, are increasingly effective. Shutting off Iran from the global banking system has been particularly successful. As the old saying goes, "follow the money." U.S. banking officials are particularly well equipped to track money moving through the global financial network, and Iranian money is running out of places to hide.
Iranian nuclear weapons scientist Shahram Amiri, who defected to the United States last year, changed his mind and went back to Iran. Amiri received $5 million from the CIA for the information he provided. But now the CIA leadership is split between thinking Amiri was a double agent or (more likely) deranged (which he appeared to be from the beginning.) Amiri is one of several Iranians the CIA has gotten out of Iran in the past year, often to save them from arrest and execution (for providing information to the U.S.). The CIA was able to double check most of Amiris revelations, and found him to be credible. To the Iranian government, Amiri is a deranged traitor, but they have decided to avoid embarrassment by claiming that he was kidnapped. Amiri can be quietly killed later, in a staged accident. He might get a hero's funeral, but dead is dead.
The latest batch of international sanctions have led to more shortages of consumer goods. The government blames the evil foreigners for the sanctions, but also uses the rising prices to obtain more tax revenue. The many corrupt officials in the government often own companies distributing consumer goods, and are believed to be raising prices more than is justified by the shortages. More goods have to be smuggled in now, and this is more expensive. Perhaps the most harmful effect of the new sanctions is the refusal of insurance companies to cover shipments of petroleum products to Iran. This is potentially devastating, as Iran imports 40 percent of its gasoline (petrol), and many similar products. The Iranian government will have to provide insurance, which adds yet another cost to getting goods into the country. Some Iranian officials have even commented (quietly) that the latest bunch of sanctions would slow down the missile and nuclear weapons programs.
The lifestyle police are running into more opposition, as they prepare to crack down on "decadent Western haircuts" seen on so many young Iranian men. At the same time, the senior clerics are trying to ban some of the more severe Islamic punishments, like stoning to death women convicted of adultery. This is a battle between the hard core conservatives, and more numerous "moderate" conservatives (who still want to kill adulterers, but by hanging instead of stoning.") Dead is dead.
July 15, 2010: A suicide bomb attack in the southeast killed 27 people, including several members of the Revolutionary Guard. Iran blamed the U.S. for backing the bombers. The attackers were Baluchi separatists that Iran has been fighting for centuries. Armed Baluchi groups base themselves across the border in Pakistan (which refuses to crack down on this). The Baluchi are Sunni, and resent the way they are persecuted by the Shia majority in Iran. About two percent (1.4 million) of Iranians are Baluchi. Most Baluchi tribes live across the border in Pakistan (all of southwest Pakistan is called Baluchistan, or "Land Of the Baluchi", a tribe ethnically related to the Pushtun in Afghanistan and Pakistan, and the Iranians themselves). Iran recently executed two leaders of the primary Baluchi resistance organization (Jundallah), and the Baluchis promised to strike back. There's not much evidence of U.S. support for these Baluch rebels, but there is a lot more evidence of Iranian support for Shia terrorists in Iraq and Sunni terrorists in Iran.