Known as Persia until 1935, Iran became an Islamic republic in 1979 after the ruling monarchy was overthrown and Shah Mohammad Reza pahlavi was forced into exile

Reaction, Repression, and Conflict

Improved relations in the 1970s, especially in the economic sphere, were established with Communist countries, including the USSR. However, relations with Iraq were antagonistic for much of the late 1960s and early 1970s, in great part due to conflict over the Shatt al Arab waterway. A number of armed clashes took place along the entire length of the border. In Apr., 1969, Iran voided the 1937 accord with Iraq on the control of the Shatt al Arab and demanded that the treaty, which had given Iraq virtual control of the river, be renegotiated.

In 1971, Britain withdrew its military forces from the Persian Gulf. Concerned that Soviet-backed Arab nations might try to fill the power vacuum created by the British withdrawal, Iran increased its defense budget by almost 50%, and with the help of huge U.S. and British defense programs, emerged as the region's strongest military power. Although Iran renounced all claims to Bahrain in 1970, it took control (Nov., 1971) of three small, Arab-owned islands at the mouth of the Persian Gulf. Iraq protested Iran's action by expelling thousands of Iranian nationals.

In Mar., 1973, short of the end of the 25-year 1954 agreement with the international oil-producing consortium, the shah established the NIOC's full control over all aspects of Iran's oil industry, and the consortium agreed (May, 1973) to act merely in an advisory capacity in return for favorable long-term oil supply contracts. In the aftermath of the Arab-Israeli War of Oct., 1973, Iran, reluctant to use oil as a political weapon, did not participate in the oil embargo against the United States, Europe, Japan, and Israel. However, it used the situation to become a leader in the raising of oil prices in disregard of the Tehran Agreement of 1971. Iran utilized the revenue generated by price rises to bolster its position abroad as a creditor, to initiate domestic programs of modernization and economic development, and to increase its military power.

The Islamic Revolution

The new government represented a major shift toward conservatism. It nationalized industries and banks and revived Islamic traditions. Western influence and music were banned, women were forced to return to traditional veiled dress, and Westernized elites fled the country. A new constitution was written allowing for a presidential system, but Khomeini remained at the executive helm as Supreme Leader. The Revolutionary Guard was established separately from the military as an ideologically based corps charged with defending the revolution. Clashes occurred between rival religious factions throughout 1979, as oil prices fell. Arrests and executions were rampant.

On Nov. 4, 1979, Iranian militants seized the U.S. Embassy in Tehran, taking 52 American hostages. Khomeini refused all appeals, and agitation increased toward the West with the Carter administration's economic boycott, the breaking of diplomatic relations, and an unsuccessful rescue attempt (Apr., 1980). The hostage crisis lasted 444 days and was finally resolved on Jan. 20, 1981, the day Ronald Reagan was inaugurated as U.S. president. Nearly all Iranian conditions had been met, including the unfreezing of nearly $8 billion in Iranian assets.

War and its Aftermath

Iran immediately began rebuilding the nation's economy, especially its oil industry. Tensions also eased at that time with neighboring Afghanistan, as Soviet troops there began withdrawal (completed in 1989), after a presence of nearly 10 years. During the Soviet occupation, Iran had become host to nearly 3 million Afghan refugees. Khomeini died in 1989 and was succeeded by Iran's president, Sayid Ali Khamenei. The presidency was soon filled by Ali Akbar Rafsanjani, who sought improved relations and financial aid with Western nations while somewhat diminishing the influence of fundamentalist and revolutionary factions and embarking on a military buildup. A major earthquake hit N Iran on June 21, 1990, killing nearly 40,000 people.

When Iraq invaded Kuwait in Aug., 1990, Iran adhered to international sanctions against Iraq. However, Iran condemned the use of U.S.-led coalition forces against Iraq during the Persian Gulf War (1991), and it allowed Iraqi planes fleeing coalition air attacks to land in the country. As a result of the war and its aftermath, more than one million Kurds crossed the Iraqi border into Iran as refugees.

Rafsanjani was reelected president in 1993. The United States suspended all trade with Iran in 1995, accusing Iran of supporting terrorist groups and attempting to develop nuclear weapons. In 1997, Mohammed Khatami, a moderately liberal Muslim cleric, was elected president, which was widely seen as a reaction against the country's repressive social policies and lack of economic progress. Also in 1997, Iran launched a series of air attacks on Iraq to bomb Iranian rebels operating from Iraq. Several European Union countries began renewing economic ties with Iran in the late 1990s; the United States, however, continued to block more normalized relations, arguing that the country had been implicated in international terrorism and was developing a nuclear weapons capacity.

In 1999, as new curbs were put on a free press, prodemocracy student demonstrations erupted at Teheran Univ. and other urban campuses. These were followed by a wave of counterdemonstrations by hard-line factions associated with Ayatollah Khamenei. Reformers won a substantial victory in the Feb., 2000, parliamentary elections, capturing about two thirds of the seats, but conservative elements in the government forced the closure of the reformist press. Attempts by parliament to repeal restrictive press laws were forbidden by Khamenei. Despite these conditions, President Khatami was overwhelming reeelcted in June, 2001. Tensions between reformers in parliament and conservatives in the judiciary and the Guardian Council, over both social and economic changes, increased after Khatami's reelection. In Aug., 2002, a frustrated Khatami called for legislation to limit the powers of the Guardian Council and restore presidential powers to act as head of state and enforce the constitution, and in June, 2003, there were ongoing demonstrations by students in Tehran in favor of reform. In August, however, the Guardian Council rejected a bill aimed at curbing its ability to bar candidates from elections.

Tensions with the United States increased after the Anglo-American invasion of Iraq in Mar., 2003, as U.S. officials increasingly denounced Iran for pursuing the alleged development of nuclear weapons. Iranian government support for strongly conservative Shiite militias in Iraq also further soured U.S.-Iranian relations. In October, however, Iran agreed, in negotiations with several W European nations, to tougher international inspections of its nuclear installations. Concern over Iran's nuclear program nonetheless continued, and in early 2004 the International Atomic Energy Agency (IAEA) said that the country had failed to disclose all aspects of its nuclear program. Meanwhile, an earthquake, centered on Bam in SE Iran, killed more than 26,000 people in Dec., 2003.

In the Feb., 2004, elections conservatives won control of parliament, securing some two thirds of the seats. The Guardian Council had barred many reformers from running, including some sitting members of parliament, and many reformers denounced the move as an attempt to fix the election and called for a electoral boycott. Many Iranians, however, were unhappy with the failure of the current parliament to achieve any significant reforms or diminish the influence of the hard-liners. A significant number of the hard-line conservative members of the new parliament had ties to the Revolutionary Guards, who increased their economic and political influence, but they also faced opposition from more traditional conservatives such as former president Rafsanjani.

In mid-2004 Iran began resuming the processing of nuclear fuel as part of its plan to achieve self-sufficiency in nuclear power production, stating the negotiations with European Union nations had failed to bring access to the advanced nuclear technology that was promised. The action was denounced by the United States as one which would give Iran the capability to develop nuclear weapons. The IAEA said that although Iran had not been fully cooperative, there was no concrete proof that Iran was seeking to develop such arms; however, the IAEA also called for Iran to abandon its plans to produce enriched uranium. In Nov., 2004, Iran agreed to suspend uranium enrichment, but also subsequently indicated that it would not be held to the suspension if the negotiations the EU nations failed. Iran signed an agreement with Russia in Feb., 2005, that called for Russia to supply it with nuclear fuel and for Iran to return the spent fuel to Russia; despite the apparent safeguards in the agreement, it was denounced by the United States. Iran's nuclear energy program remained a contentious international issue in subsequent months.

The presidential elections in June, 2005, were won by the hardline conservative mayor of Tehran, Mahmoud Ahmadinejad, who ran on a populist, anticorruption platform. The Guardian Council had initially rejected all reformist candidates, including one of Iran's vice presidents, but permitted him and another reformist to run after an appeal. Ahmadinejad and former president Rafsanjani were the leaders after the first round, but in the runoff Ahmadinejad's populist economic policies combined with Rafsanjani's inability to pick up sufficient reformist support assured the former's win. Ahmadinejad's victory, which was marred by some interference in the balloting from the Revolutionary Guards, gave conservatives control of all branches of Iran's government.

After Iran resumed (Aug., 2005) converting raw uranium into gas, a necessary step for enrichment, the IAEA passed a resolution that accused Iran of failing to comply with the Nuclear Nonproliferation Treaty and called for the agency to report Iran to the UN Security Council. The timetable for the reporting, however, was left undetermined.

In the fall of 2005 Ayatollah Khamenei broadened the responsibilities of the Expediency Council by delegating to it some of his governmental oversight responsibilities. The move enhanced the standing and power of Rafsanjani, who had become head of the council in 1997, and was regarded as an attempt to establish a counterweight to the new president (who had been elected with the ayatollah's support) and the more radical conservative elements associated with Ahmadinejad's presidency. Ahmadinejad, meanwhile, issued strong anti-Israel, anti-Holocaust statements, and sought to set a more conservative course for Iran. The country also continued to move forward with its nuclear research program.

In Feb., 2006, the IAEA voted to report Iran to the UN Security Council. In response Iran resumed uranium enrichment and ended surprise IAEA inspections and surveillance of its nuclear facilties. The Security Council called (March) for Iran to suspend its nuclear research program in 30 days, but the statement left unclear what if any response there would be if Iran refused. For its part, Iran remained defiant, and its slow response to a European Union–led negotiating effort and the revelation of an additional, previously unknown enrichment program caused the nations involved (China, France, Germany, Russia, the United States, and the EU) to refer the issue back to the Security Council in July, 2006. The Council set an Aug. 31 deadline for Iran to stop enrichment, but Iran insisted it would continue its program and ignored the deadline. The Council's veto-holding nations were divided over the subsequent U.S. call for sanctions, but in Dec., 2006, they agreed on sanctions that barred the sale of technology and materials that could be used in Iran's nuclear program. and the international assets of certain companies associated with program were frozen. After a new deadline for stopping enrichment also passed without Iranian action, additional sanctions were imposed in March, but Iran continued with its enrichment activities.

Also in Dec., 2006, Ahmadinejad's supporters and allies suffered losses in elections for local councils and the Assembly of Experts; more moderate conservatives were the biggest winners, and reformists did sufficiently well to reemerge as a political force. The most significant winner was Rafsanjani, who was reelected to the Assembly of Experts and received the most votes of any Tehran Assembly candidate.

Fifteen British naval personnel were seized in Mar., 2007, by Revolutionary Guards forces in what Iran asserted were its waters. The British disputed the claim, and called for them to be released. After two weeks marked by behind-the-scenes negotiations and Iranian broadcasts of the British personnel saying they had violated Iranian waters (which the personnel, after their release, said were coerced), the British were released.

The Iranian revolution put an end to the rule of the Shah, who had alienated powerful religious and political forces with a program of modernization and Westernization.

Persia, as Iran was known before 1935, was one of the greatest empires of the ancient world, and the country has long maintained a distinct cultural identity within the Islamic world by retaining its own language and adhering to the Shia interpretation of Islam.

In 2002, US President George W Bush declared Iran as part of an "axis of evil". While Mr Bush's successor, Barack Obama, has softened his tone, Washington continues to accuse Iran of trying to develop nuclear weapons.

Iran, which is building its first atomic power station with Russian help, says its nuclear ambitions are peaceful. In 2006 the government announced that it had succeeded in enriching uranium. President Ahmadinejad says Iran has an "inalienable right" to produce nuclear fuel.

In 2010, the UN voted to impose a fourth round of sanctions on Iran over the issue.

The country has an abundance of energy resources - substantial oil reserves and natural gas reserves second only to those of Russia.

Iran has been led by a conservative elite since 1979, but appeared to be entering another era of political and social transformation with the victory of the liberals in parliamentary elections in 2000.

But the reformists, kept on the political defensive by powerful conservatives in the government and judiciary, failed to make good on their promises.

Former President Mohammad Khatami's support for greater social and political freedoms made him popular with the young – an important factor as around half of the population is under 25.

But his liberal ideas put him at odds with the supreme leader, Ayatollah Khamenei, and hardliners reluctant to lose sight of established Islamic traditions.

The elections of June 2005 dealt a blow to the reformists when Mahmoud Ahmadinejad, Tehran's ultra-conservative mayor, became president.

Mr.Ahmadinejad's controversial re-election in June 2009 and the violent suppression of subsequent opposition protests has further widened the rift between conservatives and reformists within Iran's political establishment.

http://www.salamiran.org/content/

FOREIGN RELATIONS
Following the revolution, Ayatollah Khomeini steered Iran’s foreign policy sharply away from that of the Shah, who was once the U.S.’s strongest ally in the region. In September 1980, during the U.S. hostage crisis, Iraq invaded Iran to prevent the spread of the Islamic Revolution to Iraq’s Shi’a, seize the heavily-Arab province of Khuzestan, and gain control of the Shatt al-Arab, the waterway between the two countries. With the remnants of the Shah’s strong (and U.S.-supplied) military infrastructure and thousands of willing youth volunteers, the Islamic Republic of Iran surprised Iraq with its ability to defend itself. In 1982, Ayatollah Khomeini turned down an Iraqi cease-fire proposal and demanded that Saddam Hussein be removed. After eight punishing years of war, in July 1988 the Islamic Republic of Iran at last agreed to the cease-fire implemented in UN Security Council Resolution 598. Neither nation made any significant territorial gains in the war, although both suffered massive casualties.

Iran's relations with many of its Arab neighbors were strained during the early years of the Islamic Republic because of fears that the Islamic Revolution would spread abroad.

In 1981, Iran supported a plot to overthrow the Bahrain Government and, in 1983, Ayatollah Khomeini expressed support for Shi’a who bombed Western embassies in Kuwait. In 1987, Iranian pilgrims rioted during the hajj (pilgrimage) in Mecca, Saudi Arabia. Iranian officials were involved in both training and assisting Saudi Hizballah operatives in executing the 1996 terrorist bombing of the U.S. military housing facility at Khobar Towers near Dhahran, Saudi Arabia, which killed 19 and wounded more than 500 other persons, including 240 U.S. military personnel. Senior IRGC and Qods Force officials were indicted by the Government of Argentina for their alleged roles in the 1994 terrorist bombing of the Asociación Mutual Israelita Argentina (the Argentine Israelite Mutual Association or AMIA), which killed 85 people and wounded scores of others.

Since September 2002, the International Atomic Energy Agency (IAEA) has been working to clarify the nature of Iran’s nuclear program. In one of his most detailed reports to the Board of Governors on Iran’s activities, IAEA Director General Mohamed ElBaradei indicated in November 2004 that Iran failed to report, declare, and provide design (or updated design) information on many issues. This included:

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  Six failures to report the import of nuclear material, activities to process/use this material, testing of centrifuges, laser enrichment activities, production of specific nuclear materials, and the irradiation of nuclear materials and subsequent separation of plutonium.
  
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  Two failures to declare nuclear facilities, including a pilot centrifuge enrichment facility at Kalaye Electric Company, the laser enrichment plant at the Tehran Nuclear Research Center, and a pilot uranium laser enrichment plant at Lashkar Ab’ad.
  
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  Six failures to provide design information or updated design information for facilities in which nuclear material processing and storage took place.
  
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  The report also indicated a frequent failure to cooperate to facilitate the implementation of safeguards as evidenced by the extensive concealment activities.
  

In response to the IAEA Board’s report of noncompliance, the UN Security Council (UNSC) has adopted a Presidential Statement (S/PRST/2006, March 2006) and six resolutions (UNSCRs) on Iran: UNSCR 1696 (July 2006), UNSCR 1737 (December 2006), UNSCR 1747 (March 2007), UNSCR 1803 (March 2008), UNSCR 1835 (September 2008), and UNSCR 1929 (2010). Four of the five resolutions (UNSCRs 1737, 1747, 1803, and 1929) impose Chapter VII (legally binding) sanctions on Iran.

In June 2006, China, France, Germany, Russia, the United States, and United Kingdom--the P5+1, also known as the EU 3+3--offered Iran a substantial incentives package of economic cooperation and assistance in return for Tehran’s full cooperation with the IAEA and suspension of its uranium enrichment-related and reprocessing activities. The P5+1 presented Iran with a refreshed package of incentives in June 2008, but Iran has yet to respond clearly and positively to this offer, or comply with its UNSC and IAEA obligations. On April 8, 2009, the P5+1 invited Iran to meet with the group to resolve international concerns and rebuild the confidence of the international community. On October 1, 2009, the United States and the P5+1 members met with representatives from Iran in Geneva, Switzerland. During this meeting, the U.S. delegation also held a sidebar meeting with the Iranian delegation during which there was a frank exchange on human rights and the U.S. stressed again the need for Iran to take concrete and practical steps to meet its international nuclear obligations.

In late 2009, Iran appealed to the IAEA for fuel assemblies for the Tehran research reactor (TRR), which has operated for decades and produces medical isotopes. The IAEA, with support from the United States, France, and Russia, offered a TRR re-fueling proposal that would utilize Iran’s own available low-enriched uranium (LEU) at the Natanz fuel enrichment plant by sending 1,200 kilograms of the LEU to Russia for further enrichment, fabricating it into fuel, and returning it to Iran for use in this safeguarded reactor. The plan would both provide the TRR with much-needed fuel to continue to produce medical isotopes while also beginning to build international confidence in Iran’s peaceful intent by removing the majority of its LEU stockpile from Iran’s territory. As of June 2010, Iran continued its enrichment activities, now at nearly 20%, according to the IAEA, and had not agreed to this TRR fuel swap deal.

Both Iran and Russia believe they have important national interests at stake in developments in Central Asia and the Transcaucasus, particularly regarding energy resources in the Caspian Sea. The U.S. has expressed concern about Russia’s sales of military equipment and technology to Iran and Russian assistance in building a nuclear facility at Bushehr.

Iran spends about 3.3% of its GDP on its military. Iran's armed forces consist of both a national military, which was held over from the Shah's government, and the Islamic Revolutionary Guard Corps, each with its own ground, naval, and air braches. The Iran-Iraq war took a heavy toll on Iran’s military, which was once the strongest in the region during the Shah’s reign. Iran has since worked to modernize its military, both conventionally and through the development of its ballistic missile and nuclear programs.

U.S.-IRANIAN RELATIONS
On November 4, 1979, Iranian students seized the American Embassy in Tehran, where they held 52 Americans hostage for 444 days. Although it has been claimed that Ayatollah Khomeini did not have prior knowledge of the students’ plans, he gave his full support to them throughout the seizure. The students claimed that they occupied the American Embassy to avert another U.S.-orchestrated coup to restore the Shah to power; suspicions arose after the U.S. admitted the Shah for medical treatment in October 1979.

On April 7, 1980, the United States broke diplomatic relations with Iran, and on April 24, 1981, the Swiss Government assumed representation of U.S. interests in Tehran. Iranian affairs in the United States are represented by the Embassy of Pakistan, in the Iranian Interests Section, in Washington, DC. The Islamic Republic of Iran also has a permanent mission to the United Nations in New York City.

In accordance with the Algiers declaration of January 20, 1981, the Iran-U.S. Claims Tribunal (located in The Hague, Netherlands) was established for the purpose of handling claims of U.S. nationals against Iran and of Iranian nationals against the U.S. However, U.S. interaction with Iran at The Hague solely covers legal matters.

The U.S. Government, by executive orders issued by the President as well as by congressional legislation, prohibits nearly all trade with Iran. Sanctions have been imposed on Iran because of its sponsorship of terrorism, its refusal to comply with IAEA regulations regarding its nuclear program, and its human rights violations. However, these sanctions are meant to target the Iranian Government, not the people of Iran. As a result, there are a number of exemptions allowed by the U.S. Government intended to benefit the Iranian people. The following trade is permitted: licensed exports of U.S. agricultural and medical products to Iran, U.S. donations of articles intended to relieve human suffering in Iran (food, clothing, etc.), gifts valued at $100 or less, trade in “informational” materials (films, publications, etc.), U.S. imports of Iranian carpets, and U.S. imports of Iranian foodstuffs intended for human consumption (dried fruit, nuts, etc.). Trade restrictions have been temporarily lifted in the past during humanitarian crises, such as the 2003 Bam earthquake, to allow for donations from American citizens and permit U.S.-based non-governmental organizations to assist with the relief and reconstruction efforts. For a comprehensive overview of legally permitted trade with Iran, please visit the website of the Office of Foreign Assets Control at the Department of Treasury (http://www.treas.gov/offices/enforcement/ofac/programs/iran/iran.pdf).