While Iran scored major foreign policy successes in 2007, 2008 looks set to see reformists squaring off against hardliners, writes Rasha Saad As 2007 drew to a close, the possibility of a US attack on Iran dwindled thanks to a bombshell US intelligence report issued early December contradicting the Bush administration's repeated assertions that Iran has been secretly working to build nuclear weapons. A coup for the Islamic Republic, the report found that Tehran has responded pragmatically to outside pressure, enriching uranium solely for civil energy purposes. The US intelligence estimate has not only defused pressure towards an imminent strike on Iran, but has also made additional economic sanctions unlikely, giving allies and business partners such as Russia and China reason to block further action in the UN Security Council. US President Bush, nonetheless, pledged to maintain pressure on Iran and lobbied for international support for a meeting to discuss further sanctions at the beginning of 2008. The UN Security Council has imposed two rounds of limited sanctions on Iran since December 2006 for what it describes as Tehran's failure to meet UN demands to halt uranium enrichment. Yet while 2007 witnessed much international pressure brought to bear on the Islamic Republic, by year's end it was the US and its European allies who were on the defensive. Contrary to how the report was widely received, White House officials claimed that the intelligence estimate proves that suspicions about Iran's intentions were warranted, given that it clearly had a weapons programme to begin with. "On balance, the estimate is good news," National Security Adviser Stephen Hadley said at the White House. "On the one hand, it confirms that we were right to be worried about Iran seeking to develop nuclear weapons. On the other hand, it tells us that we have made some progress in trying to ensure that that does not happen. It also tells us that the risk of Iran acquiring a nuclear weapon remains a very serious problem," he added. Such assessments did not spare the Bush administration from being widely mocked for exaggerating the Iranian nuclear danger. Cartoons and articles lambasting Washington spin-doctors were circulated in many Arab and foreign newspapers. The intelligence report also has an impact on US-Iranian talks on Iraq. Since the beginning of 2007, efforts have been made to find ways to quell Iraq's violence, with the Iranians initiating the idea of dialogue and then withdrawing, accusing the US of arrogance. The first meeting materialised in May after a tit-for-tat escalation of US-Iranian tensions. The US detained five Iranians in Iraq, accusing them of of a "scheduling conflict", according to American and Iraqi officials. Many analysts see this as genuine, however, and note that US officials have softened their rhetoric on Iran in Iraq in recent weeks, stating that Tehran appears to have cut back its supply of weapons -- particularly improvised explosive devices, used as roadside bombs -- to militias in Iraq. With accusations toned down, analysts see a link to the US intelligence report, and even the possibility of high-level meetings between the two countries taking place soon. The report is also seen as opening the door to compromises on other contentious issues, such as Lebanon and Palestine. Meanwhile, Iranian diplomacy logged another success vis-à-vis tensed relations with neighbouring Gulf countries. Iranian diplomats have been actively touring Gulf countries, alleviating fears over Tehran's nuclear activities and receiving assurances that Gulf states would not back the US were Washington to attack the Islamic Republic. This diplomacy bore its greatest fruit when Iranian President Mahmoud Ahmadinejad became the first Iranian president to attend a summit of the Gulf Cooperation Council (GCC). The meeting, held in Doha, Qatar, in December, was hailed by many as a symbolic milestone in defusing decades of tension between Iran and its neighbours. Gulf officials have frequently warned against striking Iran. This year, however, saw Gulf countries for the first time vocally opposing Washington's stance towards Iran, culminating in a regional security meeting held in Manama, Bahrain, earlier this month where GCC leaders openly challenged Defense Secretary Robert Gates, accusing the US of hypocrisy for supporting Israeli nuclear weapons and questioning Washington's refusal to discuss nuclear issues directly with Iran. But if Iranian foreign diplomacy gained a boost during 2007, events at home were less encouraging. With hardliners replacing reformists in power in 2007, the so-called "lost basics" of the Islamic Revolution returned to the agenda, signalling a period of internal dissent and instability. Ahmadinejad found himself blamed for unfulfilled economic promises, accelerating inflation, and a drastic decrease in Iranian standards of living. Eight of his cabinet members resigned during the year, mainly due to differences with the president on the handling of economic issues. Against a backdrop of deepening economic recession, a "second cultural revolution" has resupplying weapons to insurgents. Iran in folportedly been taking place in Iranian universities and cultural life. Iranians have suffered a crackdown on social liberties, including regarding women's status and the standing of human rights organisations. As a consequence, Tehran's universities have witnessed a string of demonstrations in recent months. Earlier in December, hundreds of Iranian students held a protest at Tehran University, denouncing President Ahmadinejad. The demonstration -- the second within a week -- was reportedly one of the largest held this year. Protesters chanted slogans against the president and carried banners calling for the release of three fellow students who have been held since May. Iran is currently holding up to 24 students in jail. "Live Free or Die," read one of the banners. Reformists did not stand tongue-tied. Their year regain power. Recently former president Mohamed Khatami broke two years of virtual political silence to lambaste Ahmadinejad in a series of speeches. The former president accused his successor of increasing poverty in a speech to hundreds of students at Tehran University. Reformists are eyeing 14 March, when legislative elections will take place. In December, Iranian reformists announced a coalition inspired by Khatami to win back parliament and save Iran from the "crisis" they say has been created by Ahmadinejad. The coalition brings together 21 moderate parties, including the largest reformist party, Islamic Iran Participation Front, and the Executives of Construction Party, founded by ex-cabinet members from the 1989-1997 pragmatic presidency of Akbar Hashemi Rafsanjani. ty, the Association of Combatant Clerics, and the Organisation of Islamic Revolution Mujahideen, whose members served as key lawmakers in the previous parliament. The other major pro-reform party, the National Confidence Party, headed by former parliament speaker Mehdi Karroubi, will have about 80 per cent common candidates with the coalition, spokesman Abdullah Nasseri said. The reformist camp is banking on a high elections turnout, hoping that frustration with the government's economic policies will carry them through the March polls. "Back-breaking inflation is felt by people and will be a serious reason to vote," Nasseri said. The 2008 March elections will be closely watched as crucial for the future political direction of the Islamic Republic, both domestically and in its foreign policy. The coalition was also joined by Khatami's par2008 is expected to be dedicated to attempts to lowing weeks detained or put under house arrest four US-Iranian citizens. One was accused of seeking to overthrow Tehran's government. A second meeting of US-Iranian officials scheduled for mid-December was postponed because
