For those worried over its nuclear ambitions, Iran's defiant and self-confident government created plenty of trouble. But in 2010, a wounded and more isolated Iranian regime will become more dangerous and less predictable.

Until 2009, the regime had grown steadily stronger and more assertive. The rise in oil prices from $29 per barrel in November 2003 to $147 per barrel in July 2008 provided enough revenue to sharply boost state spending on social services, state subsidies, and more efficient repression. In 2005, a reformist president who fed public appetite for change, Mohammad Khatami, gave way to populist conservative Mahmoud Ahmadinejad. Aggressive advocacy of the country's right to enrich uranium rallied many Iranians to their government.

Things also went well for Iran's regional influence. In 2001, U.S. forces removed its antagonist to the east, the Taliban government in Afghanistan. In 2003, they took care of its archenemy to the West, Saddam Hussein. Iran extended its reach via closer ties with Syria's government, with Hezbollah in Lebanon, and with Shiite powerbrokers inside Iraq. With crucial backing from Supreme Leader Ayatollah Ali Khamenei, Ahmadinejad pushed full speed ahead with construction of a nuclear program in defiance of much of the international community.

In 2009, things took a sharp turn south. The financial crisis and global recession burst the oil-price balloon. A government grown used to windfall profits found itself with a lot less revenue. In June, its ally Hezbollah suffered a stinging defeat in Lebanon's parliamentary elections. Syrian President Bashar al-Assad, looking to diversify his regional risks, made overtures to Iran's main regional rival, Saudi Arabia. A more assertive government in Baghdad now threatens Iran's influence in southern Iraq.

Even the recent shift in the balance of power within the United Arab Emirates has Iran worried. The financial crisis has taken a toll on Dubai, where Iran's government has executed many a banking transaction beyond international scrutiny. As Abu Dhabi, much less friendly with Iran, uses Dubai's misfortune to increase its authority within the UAE, Ahmadinejad's government will lose access to an important conduit for capital.

But the most frightening problems are at home. In June, presidential balloting alternated between tragedy and farce as a nakedly rigged election provoked confrontation in the streets. Crucially, Ayatollah Khamenei fundamentally compromised his domestic authority by siding publicly with an increasingly unpopular government. Replacing a president is a problem. Replacing a supreme leader threatens the entire show.

Adding to the anxiety, the recent death and funeral of Grand Ayatollah Hossein Ali Montazeri -- a vocal critic of Iran's government and this summer's elections who happened to be of higher clerical rank than Khamenei himself -- provoked opposition rallies involving hundreds of thousands of people. Never has it been more obvious that 70 percent of Iranians aren't old enough to remember the revolution from which the regime still draws its legitimacy.

Ahmadinejad and Iranian state officials proved willing to defy UN Security Council resolutions and Western-sponsored sanctions when things were going well. Embattled at home and with fewer options abroad, the regime will likely move from predictably aggressive to unpredictably belligerent.

How else to explain the sudden Iranian decision in December to send troops into Iraq to claim ownership of a small Iraqi oil well? The troops have been withdrawn, though the dispute over territory apparently continues.

The move never had any impact on oil production. It was probably intended to accomplish three goals.

First, Tehran wanted to undermine Iraqi Prime Minister Nouri al-Maliki just before parliamentary elections scheduled for March. By sticking a thumb in Maliki's eye, Iran hoped to prove that he's not the strongman he claims, shifting Iraqi public support toward someone less resistant to Iran's influence.

Second, Ahmadinejad's government may have hoped to divert attention from opposition protests at home by triggering a manageable confrontation abroad. The size of the Montazeri funeral protests suggests that's unlikely to work.

Most importantly, the regime probably wanted to show the world that adversity has not weakened its nerve. As threats of sanctions grow louder, we'll see more such flashes of defiance. That's why three American hikers charged with illegal entry into Iranian territory will likely face a trial and tough sentences instead of early release. That's why Iran test-fired another high-speed medium-range missile on Dec 16.

It's also why Ahmadinejad made a show on Dec. 22 of his announcement that Iran would ignore an American-imposed, year-end deadline to accept a UN-drafted compromise on uranium enrichment. Now Ahmadinejad says Iran will produce higher enriched uranium and build 10 new enrichment facilities. Iran's right to a nuclear program may be the last thing left that Ahmadinejad and all those young protesters can agree on.

And that's why 2010 will be a year of intensified confrontation. In the past few days, the British and American governments have agreed that nuclear negotiations have been given long enough to succeed, and that it's time for a "two-track approach," one that includes both more diplomacy and additional sanctions. It will be spring before initial sanctions are in place. The Security Council will produce the broad, "optional" sanctions that China and Russia won't veto. The United States and its European allies will then coordinate on tougher, more targeted measures.

Sanctions won't be tough enough to force Iran to renounce its nuclear ambitions, but they'll be harsh enough to encourage an increasingly anxious Iranian government to lash out. It'll be more difficult in 2010 to predict how, when and where that will happen.

Iran Sacrifices Its Future
Paul Greenberg

I have just read about a new high-water mark in the persecution of intellectuals. Or just the intelligent. For setting it, the world can thank Mahmoud Ahmadinejad, president of the Islamic Republic of Iran, and his clerical keepers, notable among them the Ayatollah Ali Khamenei

Tension Simmers in Iran
William Pfaff

Continued post-election protests in Iran identify either a pre-revolutionary situation or that condition which the French call 'fin de regime' -- political decadence suggesting that the end may be near, but might also be very bad. Recent events in Iran resemble those that led up to the revolution that compelled the Shah to flee Iran in 1979 and were followed by the creation of the Islamic Republic. The question is what will the outcpome be this time and what impact it will have on stability in the Middle East

Voting Present on Iran
Victor Davis Hanson

Instead of complying with international requests to stand down, Iran has decided to step up efforts to enrich uranium, which, despite the government's denial, is all but certainly intended for a bomb. Here's why ...

New Palestinian Statehood Push and Nuclear Threat to Israel
Louis R. Beres

The Palestinian Authority still makes its aggressive intentions plain. On its official emblem, Israel is covered with an Arab Keffiyah headdress, next to a Kalashnikov rifle, and a picture of Yasser Arafat.

U.S. Must Remain Active Diplomatic Player in Iraq
Henry A. Kissinger

So far, the Obama administration has recoiled from discussing Iraq's geo-strategic significance and especially America's relation to it. Yet while Iraq is being exorcised from our debate, its reality is bound to obtrude itself on our consciousness. America's withdrawal from Iraq will not diminish the geo-strategic importance of the country even as it alters the context of it.

Upcoming Iraqi Elections - Political Tremors
Brett H. McGurk

Recent news that Sunni candidates were banned from upcoming Iraqi elections has focused attention on that March 7 vote -- a crucial election for a new government to serve through 2014. Much is at stake, and the United States will have to maneuver carefully, supporting but not overtly interfering with the vote, cabinet formation, and then a new Iraqi government.

Mind of Martyr: How to Deradicalize Islamist Extremists
Jessica Stern

Is it possible to deradicalize terrorists and their potential recruits? Saudi Arabia, a pioneer in terrorism prevention and rehabilitation, claims that it is. And yet so far, the Saudis have shared very little information about their program's successes and failures.

 

(C) 2010 Ian Bremmer