President Mahmoud Ahmadinejad and supreme religious leader Ayatollah Ali Khamenei are definitely locked in a power struggle. But they are trying to settle this dispute without triggering a civil war. The basic problem is that Iran is dominated by the Islamic conservative minority (about 20 percent of the population). This group benefits from a constitution that gives the senior clergy (led by Ayatollah Ali Khamenei) 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. Ahmadinejad knows this, but he also knows that the clergy are incompetent when it comes to running the country, and corrupt as well. Khamenei just wants to keep the clerics in power, and out of jail (where many Iranians want to put them, at least the most visibly corrupt ones.) Ahmadinejad wants to reform the government. That means cleaning up the corruption and making things more efficient. Then, Ahmadinejad wants to destroy Israel.
The current clerical control in Iran 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. Ahmadinejad sees all this Iran-supported terrorist activity as unnecessarily risky, and expensive (something most Iranians are aware of, and don't appreciate at all).
Ayatollah Ali Khamenei is apparently preparing to "veto" Ahmadinejad's job (as president) and install a more respectful (of clerical domination) government. Ahmadinejad is increasingly defying clerical control. Ahmadinejad has already refused to obey some of Khamenei's orders. If this keeps escalating, and neither man backs down, there will be blood. But in the meantime, Ahmadinejad denies that there is any strife between him and the clerics. Like many other things Ahmadinejad says, that isn't true.
China tried, and failed, to suppress a UN research effort that concluded Iran and North Korea were cooperating in developing ballistic missiles. China is an ally (economic and political) of Iran, and does what it can to keep Iran's bad behavior out of the media.
The Battle of Bahrain isn't over, but it appears that the Iranian effort to support local Shia in overthrowing the monarchy, has failed. The Arab nations over there have united in their support of the minority Bahrain Sunnis, and will maintain troops and police in Bahrain even after the current round of unrest ends.
May 14, 2011: The government ordered two boats, containing over a hundred "activists" planning on landing in Bahrain to show support for the rebels there, to turn around. The Sunni Arabs had apparently told Iran that warships would stop the two boats, even if it required the use of force. Iran doesn't want war with the Arab states, it just wants to dominate them. That is proving difficult.
President Mahmoud Ahmadinejad fired three of the 21 ministers in his cabinet, as part of his plan to reduce the cabinet to 17 ministers. One of those dismissed was the oil minister, and Ahmadinejad later said he would take over the oil minister's job until a new one could be selected. The clergy are expected to have their own candidate for this key job, as well as objections to this cabinet reorganization.
May 9, 2011: The Iranian Intelligence Minister insisted that Osama bin Laden had died years ago from disease, and the May 2nd raid, in which American commandoes claimed to have killed bin Laden, was a fraud. Iran wanted bin Laden dead, because al Qaeda was violently anti-Shia and had slaughtered over 100,000 Shia in the last two decades. In that period, most of al Qaeda's victims had been Moslems, most of them Shia.
May 4, 2011: As a result of rising oil prices and economic reforms (subsidies to fuel and food were reduced by $20 billion a year), the government has increased the military budget by over 40 percent (from $7 billion to $10 billion a year.) This is apparently to fund the construction of more ballistic missiles and, soon, nuclear weapons.
May 1, 2011: Inflation was 14 percent last month, up from 12.4 percent the month before. But the government expects inflation to subside by the end of the year, as the after-effects of the reduction in food and fuel subsidies takes effect. Many are not so confident that the inflation will decline.
April 30, 2011: The chief-of-staff of the Iranian armed forces (general Hassan Firouzabadi), reminded everyone that the Persian Gulf belonged to Iran (which used to be called Persia). Firouzabadi called on rebellious Arabs (except for those in Syria, where Iran backs the minority Shia dictatorship) to overthrow their unelected governments and install pro-Shia religious dictatorships. This is unlikely to happen, if only because most Arabs, especially the Sunni (85 percent) majority, are not impressed by how that form of government has worked out in Iran. Besides, Iranians are seen by Arabs as an arrogant, non-Arab, bunch of bullies. That's also how many Arabs view the West, but the Iranians seem more intent on conquering Arabia and taking all the oil. Plus, the Iranians are threatening the West as well, so the enemy of my enemy is my friend. Many in the West don't appreciate this aspect of the situation.
April 25, 2011: Iranian officials revealed that another complex computer worm, this one called Star, had hit Iranian government facilities. Star is described as being similar to the earlier Stuxnet worm.
April 21, 2011: Kuwait accused Iranian spies, arrested in Kuwait last year, of having stockpiled explosives, to be used on important facilities, if the Iranian government ordered it. The Iranian spies also spent a lot of time recording what U.S. troops in Kuwait were doing. For the last two decades, Kuwait has hosted American logistical bases, and stockpiles of American military equipment. All this is to provide the U.S. with a base in case Kuwait is threatened again by its neighbors. The major threat now is Iran, although many Iraqis still believe Kuwait is their lost "19th province."