Israeli plans, the Journal asserts, constitute the most enigmatic and potentially volatile factor in determining the resolution of the nuclear dispute. The United States’ military forces have drawn up plans for defending against Iranian retaliation in the event of an Israeli strike, and moved thousands of military personnel and a second aircraft carrier strike group to the Persian Gulf region.

Planned joint military drills between the United States and Israel, among the largest to date, were postponed as of January 15 in what may be an attempt by the U.S. military to defuse the situation somewhat. Meanwhile, Chairman of the Joint Chiefs of Staff Martin Dempsey is travelling to Israel January 19 largely to discuss the unpredictable situation, reflecting concern in the higher echelons of the American military that some sort of conflict could be forthcoming.

To stall both Iran’s accelerating nuclear program as well as the potential eruption of conflict, the United States and its European allies are pushing additional sanctions on Iran’s oil industry which would penalize any companies doing business with Iran’s oil sector. British Foreign Secretary William Hague announced January 15 that he believed the European Union would enact sanctions akin to those of the United States’ aimed at removing most of the international demand for Iranian oil.

However, other major economic powers, such as China and India, appear reluctant to agree to any major oil embargo on Iran.

China has made it clear to Western nations that its economic concerns would dictate its political actions towards the Islamic Republic. China depends upon Iran for up to 11% of its oil–a massive and critical portion of its domestic energy, given the country’s growth and economic needs. China has already strongly denounced American sanctions on a Chinese firm that sold refined petroleum products to Iran.

India appears to be pursuing a similar policy. Reuters reports that an Indian cabinet minister asserted that India would continue to buy oil from the Islamic Republic. Iranian imports currently amount to 12% of India’s oil consumption, a figure similar to China’s and equally vital to India’s economy. While Indian companies appear to be seeking alternative supplies given the potential disruption of Iran’s oil in the event of a military conflict, demand for Iran’s oil does not appear to be falling off.

Turkey, another major economic power with political and economic ties linking it to both Iran and the United States, also seems to be spurning the push for oil sanctions. Turkey currently obtains about a third of its crude oil supply from Iran.

However, despite these notable setbacks in the push spearheaded by the United States to essentially destroy the Iranian economy, Iran’s oil market has already been hit by the tensions its nuclear program have produced. Iran’s oil is already selling at a discounted rate compared to mere months ago, and significant customers, such as Japan and South Korea, have opted to cooperate with the United States by weaning themselves off of Iranian oil.

It is too soon to say with certainty what the effect of the oil sanctions will be either on Iran’s economy or its desire for a nuclear program. The sanctions will likely prove to be a significant blow to Iran’s already anemic economy, though the scope of the damage is unclear.

As for Iran’s motivation to continue with its nuclear program, the threat of an oil embargo so far seems to have been more provocative than dampening to the Islamic Republic’s pride and bellicosity. Iran has already issued a strong warning to the Arab states of the Persian Gulf, saying that any states producing a surplus of oil to stabilize markets in the event of an embargo or conflict will be punished.

Iran’s threats both against regional Arab states–who have long opposed Iran’s expanding influence in the region–and the United States have centered on the Strait of Hormuz, a conduit for 17 million barrels of oil per day, or 35% of all global maritime oil shipments. The United States promised to destroy any Iranian attempt to blockade the Strait, though senior American officials admitted that shipments would be stopped for a time with definite global economic repercussions. Iran and the United States are reportedly corresponding over the current crisis as it relates to the Strait of Hormuz via letters, though as yet the content of the exchange is unknown.

Despite the extremely precarious situations between the United States and Iran, Israel may be the deciding factor in determining whether the next stage of the dispute over Iran’s nuclear program becomes violent.

Israeli leadership has a shorter timetable than the United States for making a decision on attacking Iran. Israeli Prime Minister Netanyahu indicated that he thought the oil sanctions would only work if Iran believed America would also be willing to attack the Islamic Republic as well.

Senior Israeli officials are also striking a more hawkish tone than usual, going so far as to accuse the Obama administration of trying to keep oil prices down before an election year while Iran’s nuclear program accelerates. If Israel decides they aren’t satisfied with the results of sanctions and covert operations against Iran, a regionally destabilizing conflict with global economic impacts may be on the horizon.

The Iranian response to the recent IAEA report has been quick, dismissive, and defiant.

Lawmakers, politicians, and Islamic Revolutionary Guard Corp commanders have bluntly attacked the report and questioned the credibility and independence of the IAEA, charging the Agency with illegally conducting its proceedings and accepting fabricated evidence. All have vehemently reiterated a commitment to the continuing progress of Iran’s nuclear program.

Absent from all responses was a substantive attempt to address and explain the most serious findings in the report, an omission unlikely to be acceptable to Western governments.

Majlis member and spokesman for the Foreign Relations Committee, Kazzem Jalali, insisted that there will be no turning back in Iran’s “peaceful” nuclear pursuit. Esmaeil Kosari, vice-chairman of the Parliament’s National Security and Foreign Policy Commission, echoed this sentiment: “Iran will continue its path powerfully and we will continue our nuclear activities within the framework of the IAEA rules”. Iranian IAEA Ambassador, Ali Asghar Soltaniyeh, repeated that the resolution would only strengthen Iran’s will to continue its nuclear activities.

There were also reports of “thousands” of students surrounding Isfahan’s nuclear site in a show of support for the government’s programs. The demonstrations were reported to have been initiated by local university students, but protests of this nature are often government orchestrated.

Coinciding with the fallout from the report, Shahid Beheshti University in Tehran launched the 17th Exhibition of Iran’s nuclear achievement on November 22nd. According to Fars News Agency, the event showcased Iran’s accomplishments in “nuclear fuel production and enrichment… nuclear agriculture, nuclear and radio medicine, nuclear fusion, [and] optic, laser and nuclear material.”

Student Basij organizations and a number of parliamentarians called for a reassessment of Iran’s participation in the NPT. “We should decrease cooperation with the IAEA to display our opposition to the recent resolution,” said Mehdi Mehdizadeh of the Majlis’National Security and Foreign Policy Commission.

Responding to media reports discussing the possibility of Israeli air strikes, IRGC Commanders and MPs released a familiar stream of threats and challenges, decrying “psychological operations” against the Islamic Republic, and vowing to “deal with” the US in the event of the “slightest mistake.” MP Parviz Sorouri further warned that, “Tel Aviv will be reduced to a pile of dust” if Iran is attacked.

Welcoming the prospect of Israeli attacks, Revolutionary Guards Air and Space Commander Amir-Ali Hajizadeh said: “It is our great hope that they will do so. For a long time, there has been an energy potential which we are interested in spending so we can send the enemies of Islam and Muslims forever to the dustbin of history.”

Political elites have tended to be more cautious in their public pronouncements, but Hajizadeh’s comments are not uncharacteristic of a system that has consistently rewarded risk-taking and has made a virtue of brinksmanship and an art of the cultivation of crisis.

A more conciliatory tone was taken by Foreign Minister Ali Akbar Salehi, who said, “We are ready to cooperate with the agency more than before on condition that the agency readjusts its attitude and acts according to the statute and safeguards agreement.”

Speaking with Charlie Rose on November 18, Mohammad Javad Larijani also offered measured and moderate responses. While defending Iran’s behavior and challenging the IAEA report, he questioned the novelty of the evidence, the arbitrary nature of the inspector’s demands, and the independence of the Agency, asserting Iran’s right to “advanced nuclear development” and insisting on the “sincerity” of Iran’s NPT membership.

He explained that Tehran required advance justification for and notification of pending inspections, and maintained that Iran has been fully cooperative with its NPT obligations. Larijani also suggested Iran might reconsider the tabled external development option, an offer unlikely to be taken seriously given Tehran’s history of stalling and obfuscating in nuclear negotiations.

Iran’s official statement to the IAEA Board of Governors issued on November 18th continued along similar lines. Ambassador Soltaniyeh’s response failed to meaningfully address any of the claims raised by the Agency’s report, instead taking the form of a prolonged rebuke and declamation. The document charged the agency with prejudicial and improper proceedings, exceeding its lawful remit, and “unprofessional, unbalanced, illegal, and politicized” treatment of Iran. Most of the report dealt with criticisms of US and Israeli nuclear programs, complaints of the use of intelligence sources, accusations of fabricated evidence, and accounts of inspectors’ mistaken interest in benign sites.

It is unclear whether Tehran intends to substantively engage with the claims made in the Agency’s report.

Despite the deceptive brevity of his words, Khamenei’s statement is in actuality an extremely significant threat against the pro-Ahmadinejad faction. Ahmadinejad and his supporters have been targeted and marginalized for repeatedly pushing against the Supreme Leader’s directives and supporters, as well as espousing what the traditional conservatives in Iran’s government consider to be heterodox views on Iranian history, Islam, and social norms. The constant rebelliousness has convinced Khamenei that even the highly circumscribed powers of the presidency are too much to share, and that the stability of the government is compromised if the presidency struggles against the Supreme Leader.

In the context of such a heated and fractious political climate, the Supreme Leader’s comment carries great implications and is by no means empty hypothesizing or idle discourse. Rather, the Islamic Republic–already plagued by criticism surrounding the contentious and disputed elections of 2009 and the rigorous vetting procedures that ensure only pro-regime candidates are allowed to run–may well be taking yet another step away from its stunted democratic institutions.

Weeks before Khamenei’s statement, anti-Ahmadinejad MPs were already discussing the feasibility of switching to a parliamentary-based system with a prime minister. This system would favor traditional conservatives and Khamenei loyalists, who currently form a significant majority in the legislative branch. Parliamentary Deputy Hamid-Reza Katouzian stated on September 20, almost a month before Khamenei’s comment, that “some [prominent] political analysts are pondering the lack of necessity for a president in a country like Iran blessed with velayat-e faqih (supreme clerical rule) and a great leader [like Ayatollah Khamenei].”

Arguing for a system whereby parliament would be more dominant than the executive, Katouzian noted that the idea is “currently under debate by members of parliament who have a greater political clout.” Katouzian firmly believed the plan to be feasible, saying, “If representatives have greater supervisory authority on this arrangement then the idea will without doubt have a positive impact on the country.”

Following Khamenei’s astounding assertion that the presidency could easily be switched to a parliamentary system, Speaker of Parliament Ali Larijani–himself an inveterate foe of Ahmadinejad–expressed support for the idea. Larijani claimed that constant parliamentary oversight would ensure no executive could gather too much power, and that the system could promise greater efficiency by consolidating and coordinating the legislative and executive branches.

Khamenei’s faction has repeatedly thwarted all attempts by the president and his supporters to build or maintain political momentum. Iran’s legislative branch constantly threatens investigations of the president’s actions and those of his associates, while the judicial branch has pursued a $2.6 billion corruption case against officials and businessmen very close to the president’s innermost circle.

Presidential elections loom in 2013, and parliamentary elections arrive even sooner, providing more urgency to an already fierce battle. Ahmadinejad’s faction will seek to muster support and make gains against Khamenei’s faction. However, the repeated discussion of the abolition of the presidency is certainly intended at least in part to be a signal to Ahmadinejad from the Khamenei loyalists, saying that they would rather completely alter Iran’s governmental structure than endure another presidency like his.

Voicing concerns about the removal of one of the Islamic Republic’s most important offices, former president Ayatollah Ali Akbar Hashemi Rafsanjani made a public statement against the idea, saying it would “be contrary to the Constitution and would weaken the people’s power of choice.” The fact that Rafsanjani is concerned enough to speak out against the idea of removing the presidency indicates more than ever that within Iran’s elite circles, Khamenei’s statement was taken less as a passing threat against Ahmadinejad and more as a potentially serious idea.

Nevertheless, at this point the only person with a degree of certainty as to the ultimate fate of the executive branch is the Supreme Leader himself.

Top Iranian officials loudly denounced the allegations in a number of stories published in both English and Farsi to numerous state-owned or affiliated news agencies in Iran. “The false claim that [Iran] had plotted to assassinate the Saudi Arabian ambassador has no basis in fact,” Foreign Ministry spokesman Ramin Mehmanparast stated in a press conference. Iran has also met with Saudi officials (Farsi language) to address the diplomatic fallout resulting from the allegations.

Iran’s ambassador to the United Nations published an open letter sent to U.N. chief Ban Ki-moon: “The Islamic Republic of Iran strongly and categorically rejects these fabricated and baseless allegations, based on the suspicious claims by an individual. Any country could accuse other countries through fabrication of such stories.”

Indeed, the evidence that has emerged into the public spotlight thus far has drawn questions and criticisms from a myriad of security experts and Iran analysts in the United States.

According to federal investigators’ case documents, an Iranian-American man from Texas named Manssor Arbabsiar attempted to bribe a person he believed to be a member of a Mexican drug cartel into bombing Saudi Ambassador to the United States Adel Al-Jubeir. The man claiming to be in the Zetas cartel was apparently a paid informant for federal investigators, a man previously arrested on a narcotics charge who began collaboration with law enforcement to avoid incarceration. Based on recorded conversations, and later Arbabsiar’s cooperation with investigators, American officials allege that senior members of the Quds Force of the Islamic Revolutionary Guard Corps were behind the plot.

As doubts began to be voiced following the federally-cultivated media frenzy, a number of anonymous American officials made statements to the press attempting to justify the serious allegations leveled against Iran’s government. Officials told Reuters it was “more than likely” that Iran’s Supreme Leader Ali Khamenei would have known about the plot and given it the go-ahead. Nevertheless, if American officials have concrete evidence linking Iran’s leadership–which previous statements from investigators denied–it has yet to be made public, and possible motivations for the alleged plot to murder diplomats remain unclear.

The largest question about the alleged terror plot is what would Iran or the IRGC’s Quds Force stand to gain by bombing the ambassadors of two unfriendly states in the capital of a third? As many American legislators have noted, had the plotted attack succeeded, it could have constituted an act of war against the United States. Saudi Arabia and Israel may also have considered it an act of war, had their ambassadors been attacked.

Additionally, Saudi Arabia has made it clear in the course of verbal and diplomatic sparring with Iran over Bahrain that any move against one Gulf Cooperation Council country is a move against all, and would precipitate armed conflict with the entire GCC. In other words, had the plot succeeded, Iran could be facing a military response from Saudi Arabia, Qatar, the United Arab Emirates, Bahrain, and Kuwait (Oman would be unlikely due to friendly relations with Iran) and potentially the United States and Israel as well.

If Iran’s government is in fact behind the plot, and if it had succeeded, Iran would be risking World War Three to assassinate two ambassadors, and gaining no strategic advantage to speak of. While it may be argued that Iran could seek external foes to marginalize the opposition by rallying Iranians around the flag, in Iran’s current political context, such a plan would be redundant. Two years have passed since the emergence of Iran’s Green Movement, and the central government has maintained stability with no need for an external war to smother domestic dissent.

In fact, the greatest threat currently facing the stability of the Islamic Republic is its own economy–an economy that could be utterly shattered in the event of a massive conflict in the Persian Gulf, which would slow or halt Iran’s petroleum-based economic lifeline.

Another major question surrounding the alleged plot is its clumsy execution–contrary to the simplistic and ineffective methods carried out in the assassination plot, the Quds Force have long been described as extremely sophisticated and capable by security and terrorism experts.

Robert Baer, a former CIA officer with experience watching Iran’s specialized Quds Force, told the Guardian that he doubts that the bungled plot bore any of the hallmarks of a Quds-directed hit: “This stinks to holy hell. The Quds Force are very good. They don’t sit down with people they don’t know and make a plot. They use proxies and they are professional about it. If Kassim Suleimani [head of the Quds Force] was coming after you or me, we would be dead. This is totally uncharacteristic of them.”

The Guardian asserted that there may also be a possibility that a loose cannon or overly independent IRGC commander is behind the plot to bomb the diplomats. If so, this would also raise many more questions than it would answer regarding the unity and integrity of the Quds Force. Mahan Abedin, an expert on the Quds Force at the Centre for the Study of Terrorism previously described the Quds Force as “a highly specialized department [..] subject to strict, iron-clad military discipline. It’s completely controlled by the military hierarchy of the IRGC, and the IRGC is very tightly controlled by the highest levels of the administration in Iran.”

Until more information comes to light, the precise nature and origin of Arbabsiar’s plot remains questionable.

Following his statement announcing the impending release of the hikers on September 13, Ahmadinejad was publicly contradicted and rebuked by Iran’s judiciary, which is headed by Ahmadinejad’s foe Sadegh Larijani. The judiciary warned Ahmadinejad to stop trying to annex powers rightfully belonging to other branches of government. The story made international news, further embarrassing Ahmadinejad when it was revealed that further delays to the release of the hikers were a result of their judge having gone on vacation, refusing to return. The judge’s stonewalling in such an internationally significant case can only have been a result of directives from higher up in the judiciary.

The judiciary’s humiliation of Ahmadinejad in such a public and internationally important context can only have come with either explicit or tacit approval from the Supreme Leader, who seems content to watch his subordinates deal with the unruly president.

As soon as the Iranian executive had been sufficiently chastened internationally, Iran’s judiciary delivered another stinging blow to Ahmadinejad. The same week, the judiciary announced major proceedings were underway to arrest a network of corrupt officials and businessmen who had collectively embezzled over $2.6 billion, the largest embezzlement case in Iranian history.

The case has implicated many of Ahmadinejad’s political allies, including some individuals in his entourage. Esfandiar Rahim Mashaiee, Ahmadinejad’s closest confidant, in-law, and Chief of Staff, has also been fingered as having pressured officials into giving shares in a major steel company to a favored businessman. Ahmadinejad, feeling the enormous pressures brought to bear against him, found it necessary to bring Mashaiee with him at the last minute to avoid his Chief of Staff’s potential arrest.

Not to be outdone, the head of the judiciary’s brother, Speaker of Parliament Ali Larijani indicated September 19 that the Iranian majlis may find it necessary to move forward with investigating over fifty complaints of abuse of authority (Farsi language) against the president.

The Larijani brothers, who control two out of the government’s three primary branches and enjoy the favor of Supreme Leader Ali Khamenei, appear to have Ahmadinejad politically and legally cornered. Such a coordinated assault upon the president’s standing and legitimacy can only mean that the Supreme Leader is not content with Ahmadinejad’s marginalization, but seems to be intent on the utter dismantling of Ahmadinejad’s administration, political apparatus, and reputation.

“The people and government of Syria must come together to reach an understanding,” Iranian president Mahmoud Ahmadinejad declared in an August 25 interview with the Hezbollah-owned al-Manar network. “When there is a problem between the people and their leaders they must sit down together to reach a solution, away from violence. One must not kill the other.”

Ahmadinejad’s acknowledgment of Syria’s violence between the government and the Syrian people is a reversal of his earlier statements condemning the protests.

Iran’s shift from unconditional support for Assad to urging concessions to Syrian dissidents’ calls “for freedom and justice” has resulted from a number of pressures. First, Assad’s increasingly brutal crackdowns have become too numerous and publicized to portray as military attacks on terrorists, rendering Iran’s official story, quite simply, untenable.

Iranian media now try to portray both the government and protesters as victims of roving armed gangs trying to incite sectarian violence at the behest of foreign interests–previously, Iranian media categorized all protesters as violent insurrectionists, “shadowy opposition,” or “alleged protesters.” In recent weeks, the Iranian news stories began to differentiate between peaceful protesters and these alleged armed gangs, blaming the gangs for the violence and use them as a justification for Assad’s initial use of the military. Simultaneously, however, Iranian officials continue their declarations that Syria’s armed forces should avoid using violence.

Second, Iran’s position proved to be so unpopular in the Arab world that even longtime Iran ally Hamas was willing to break ranks and condemn Assad, leading Iran to halt its payments to Hamas for at least two months, according to Reuters. In Lebanon, a stronghold of pro-Iranian sentiment, even groups with no history of opposition to Assad are murmuring about the extraordinary use of violence by pro-Assad army forces. Iran’s popularity in Arab countries has already nosedived in recent months, as its actions in Iraq and dubious reactions to protests in Arab countries take their toll. Consequently, Ahmadinejad’s decision to air his concerns about Syria on a Hezbollah-affiliated Arab broadcaster must be viewed as a sign that Iran is making efforts to reverse this major fall in popularity.

Public relations maneuvers notwithstanding, credible and widespread reports amongst Syrian refugees in Turkey suggest that Iranian military forces have themselves participated in attacks on Syrian civilians. This news is sure to further weaken Iran’s regional credibility regardless of Ahmadinejad’s attempt to assume a moderate tone in the Arab media.

Third, the fall of Libyan autocrat Muammar Gaddafi has elevated international attention on Syria and encouraged discussions of NATO involvement. NATO’s military assistance to the rebels in Libya played a major role in Gaddafi’s military defeats. Consequently, with Syria the next largest country in the Arab world still wracked by state violence, dissidents in the country have urged NATO intervention to halt the slaughter of civilians and aid in the overthrow of Bashar al-Assad.

Iran Anxious About Potential NATO Involvement in Syria

This plea for NATO involvement echoes comments made earlier in August by Russia’s envoy to NATO, Dmitry Rogozin. In a statement published both in RIA Novosti, a large state-owned Russian news agency, and the People’s Daily of China, a Communist Party news agency, Rogozin declared that the actions of NATO in Libya as well as United Nations Security Council condemnations of Assad’s crackdowns have convinced Moscow that Syria will be attacked after Libya falls.

NATO’s plans for attacking Syria, Rogozin claimed, are part of a larger plan to strategically isolate Iran in preparation for a major attack on the Islamic Republic. “The noose around Iran is tightening. Military planning against Iran is underway. And we are certainly concerned about an escalation of a large-scale war in this huge region,” Rogozin warned.

Russia’s claims of an impending NATO assault on Syria are both unlikely and unfounded, and may simply be an attempt to frighten Iran into buying more military hardware, as Russia’s arms exporters have proven willing and able to ignore sanctions on Iran.

Iran’s government has taken the supposed threat of NATO attack very seriously. Aside from an upsurge in the number of articles in Iran’s state media celebrating the country’s defensive capabilities, both Ahmadinejad and Iran’s Foreign Minister, Ali Akbar Salehi, have underscored Iran’s anxiety by making statements on Syria and Iran’s military strength.

“If, God forbid, such a [military strike] happens, NATO will be drawn into a quagmire, which it will never be able to extricate itself from,” Salehi asserted on August 28 in a statement republished on most state-owned or affiliated sites, both in Farsi and English. “Syria is in the forefront of resistance in the Middle East, and NATO cannot threaten this country with attack,” he emphasized.

In a likely allusion to Iran’s defensive readiness, Salehi also stated, “Regional nations have certainly woken up, and the awareness of nations will prevent the West from doing anything through launching a military campaign.”

The same day Salehi made his statement about possible NATO involvement, Ahmadinejad announced that Iran’s military would actively defend Syria’s government in the event of an attack, according to Fars News, a site affiliated with Iran’s Islamic Revolutionary Guard Corps. While the original source quoted was “a Lebanese paper,” Fars News’s affiliation with the IRGC indicates that, at the least, the Revolutionary Guard believe the assertion to be worth repeating. Ahmadinejad also referenced the possibility of NATO involvement in his aforementioned interview with al-Manar.

Iran’s statements and actions regarding Syria’s government indicate that the Islamic Republic will continue to encourage at least symbolic reform, while doing everything it can to ensure the survival of Syria’s Alawi leadership. Meanwhile, Iran’s government remains anxious and insecure as the tumult in the Middle East continues to redefine its relationships with regional states.

The conflict sparked by president Ahmadinejad’s power grabs has divided the very government itself, both as a result of the political capital the Supreme Leader invested in Ahmadinejad in the presidential election crisis of 2009, and for the threat to the system that Ahmadinejad’s faction represents. The battle between the president’s faction and loyalists supporting the Supreme Leader is a conflict between two visions for the Islamic Republic: the Supreme Leader’s vision, in which the ideal is nothing more than the preservation of the status quo, and Ahmadinejad’s vision, in which clerical rule is marginalized in favor of nationalism and populist religious fervor.

In the last week of May 2011, Ahmadinejad’s faction faced its staunchest opposition yet. In a remarkable development, articles published on May 25 to multiple popular conservative pro-Khamenei news sites accused the president (Farsi language) of giving $80 dollars per person to as many as 9 million Iranians before the June 2009 elections. Shortly after the publication of these stories, within a matter of hours, the Iranian parliament voted to investigate these allegations (Farsi language). The speed and coordination of the publication of the articles and parliamentary vote indicate that the move was an intentional attack, potentially ordered by the Supreme Leader himself.

Khamenei’s previous unconditional support for Ahmadinejad secured the president many powerful allies and gave him the momentum to promote his own ideology and goals at Khamenei’s expense. Using this massive political capital Khamenei invested in him, Ahmadinejad sought to supersede the institutions of clerical rule by beginning a long-term battle to annex or circumvent three of Iran’s most important ministries: the Ministry of Foreign Affairs, Ministry of Intelligence, and the Oil Ministry.

The fight between Khamenei and Ahmadinejad has divided the government along fault lines defined by ideology and pragmatism. Supporters of the Supreme Leader maintain that they are defending the Islamic Republic from a “deviant” movement (Ahmadinejad’s faction) which seeks to do away with the traditional structures of clerical rule. Ahmadinejad’s opponents may not be far off–the president’s closest confidant and adviser, Esfandiar Rahim-Mashaiee, has repeatedly made statements hinting at his disregard for traditional Shi’ite jurisprudence and emphasizing Iranian nationalism at the expense of clerical rule.

In September 2010,Ahmadinejad attempted to appoint a number of presidential “special envoys” to serve as de facto ambassadors serving the executive branch in various regions of the globe. The special envoys would have obviated the need for an Iranian Foreign Ministry by creating an entirely new institution of ambassadors, a move later put to a stop by Supreme Leader Khamenei in a public castigation of the president. Later, Ahmadinejad successfully replaced then-Foreign Minister Manouchehr Mottaki with Ali Akbar Salehi.

In April 2011, Ahmadinejad upped the ante further still by pursuing a similar strategy to replace Minister of Intelligence Heydar Moslehi. On this occasion, the Supreme Leader quickly and forcefully shut down Ahmadinejad’s plan, ordering Moslehi to stay on as Minister. Ahmadinejad, conceding his defeat in the battle for the Intelligence Ministry, wasted no time in attempting to annex the Oil Ministry by firing the current minister and delegating ministry affairs to himself. As of May 25, Ahmadinejad remains the acting Oil Minister but his powers have already been circumscribed by Khamenei and his loyalists in parliament, who have prevented him from acting as Iran’s representative during a June 2011 OPEC meeting. Iran currently holds the rotating presidency of OPEC.

Ahmadinejad’s dubious role as Minister of Oil has also exposed him to attacks from his enemies in parliament, who blame him for an explosion that killed several oil workers at a refinery where Ahmadinajed delivered a speech the same day in praise of Iran’s oil industry.

The president’s shift in fortune from an insider at the heart of the inner circle around Khamenei to a pariah has been shocking. In June 2009, following the eruption of protests due to allegations of electoral tampering, Iran’s Supreme Leader Ayatollah Ali Khamenei made a public statement declaring support for Ahmadinejad. While protesters disputed the election results, Khamenei insisted that Ahmadinejad had won fairly, thus casting the enormous power and weight of the post of Supreme Leader into the contest between demonstrators and Ahmadinejad. This move marked a step away from the traditionally aloof and unifying role the Supreme Leader had previously assumed and indicated that Khamenei had firmly cast his lot with Ahmadinejad. Since then, the government’s support for Ahmadinejad at the expense of all else has toppled many former supporters of the Supreme Leader, such as Ayatollah Rafsanjani, who elevated Khamenei to his position.

Previous Iranian presidents have been marginalized or sidelined, such as during the impeachment of the Islamic Republic’s first president, Abulhassan Banisadr. Banisadr, a longtime critic of clerical involvement in politics, was impeached in 1981 at the behest of Ayatollah Khomeini for acting against the influence of Iran’s clerics. Similarly, reformist president Mohammad Khatami, who many hoped would open up Iran’s political and social atmosphere, was circumscribed and limited in his power by the rest of the establishment. However, while Banisadr was directly impeached and Khatami was quietly sidelined, the Iranian establishment stands to lose much more in its humiliatingly public struggle with Ahmadinejad–during Banisadr and Khatami’s terms, the Iranian elites were largely united in their awareness that allowing those presidents to gain or keep power would be a threat to the survival of the government.

It seems that at this point, the pro-Khamenei faction may be willing to erase two years of effort spent defending the legitimacy of the 2009 presidential elections simply to pave the way for Ahmadinejad’s removal. This development indicates that Ahmadinejad is seen as more threatening to the Supreme Leader than the Green Movement, yet another testament to Ahmadinejad’s ability to shake Iran’s power structure.

Ahmadinejad’s response to the parliamentary investigation will reveal what powers and supporters he may still call upon as his political survival teeters on the edge of a significant fall.