The month of Muharram is a somber one in the Shi'a calendar. Ashura, the commemoration of the martyrdom of Imam Hussein, grandson of the Prophet is this weekend. The death of grand Ayatollah Montazeri, corresponding with a natural month of mourning, has already sparked demonstrations at memorial services in Qom and Isfahan that the government with their Basiji henchmen seemed a little too ready to suppress. Since the quelling of the June protests over the election, temperaments have been simmering, but now they appear on the verge of ignition again. The government seems to be taking steps to stifle expressions of grief, and the Reform Movement seems poised to spread further with more substantial clerical backing.
Government aligned Basiji and other plainclothes thugs have already attacked the staff and homes of two other prominent Reform Ayatollahs, Yusef Saanei and Jalaleddin Taheri. In Isfahan, crowds in Mosques and at public observances were reported to be attacked with clubs and tear gas. See article here: Christian Science Monitor, December 23. Government moves directly against members of the clergy could push things to a breaking point.
As a historical reference, in the Summer of 1978, as protests against the Shah were mounting, the clergy was still split as a group. However, the Shah made the mistake of pushing the clergy too hard, and in a confrontation a mullah was killed by the Shah's security. This event pushed an overwhelming percentage of the clergy to the Revolutionary camp. (I apologize for not having a reference for this or a more clear description, I am away from my office and books.) While there will, no doubt, remain reactionary clergy, symbolically lead by Ayatollah Yazdi, the treatment of Saanei and Taheri could push the balance to an overwhelming anti-government position.
It should also be noted that last March the Ahmadinejad/Khamenei coalition tried to complete their strangle-hold on the levers of government by getting Yazdi elected to head the Assembly of Experts. They failed by a long shot as Rafsanjani defeated Yazdi with almost twice as many votes. Rafsanjani, corrupt or not, is solidly in the Reform Camp. The Assembly of Experts, made up of mostly clergy, is now probably more pro-Reform as a result of the last six months, and the government leaning on respected Islamic Scholars like Saanei and Taheri will only increase the Assembly's motivation to push back against Ahmadinejad/Khamenei.
In a strange and petty move, President Ahmadinejad has stripped Reform leader Mir Hussien Mousavi of his position of president of Iran’s Academy of Art--a position he held since the institution's founding in 1999. There are rumors of Mousavi's imminent arrest.
The government may think they can crush the movement outright, and they are no doubt rallying their hard core support. If mass protests erupt again, the violence will likely be greater than June, as the government has to destroy the movement if they strike this time. On the Reform side, they have to be ready to put enough people in the street to push the less committed Basiji to give up. Small crowds can be suppressed, large and potentially uncontrollable crowds can only be smashed.
This is all still very much speculation. However, the tension has been brewing for months. The coming of Ashura this Sunday and its' symbol of martyrdom may be too much when combined with Montazeri's death and the government's already heavy-handed moves. Unlike June, if a conflagration breaks out this time, there will be widespread suffering, and the ability for either side to back away will likely disappear.
The situation should definitely be watched closely over the next week.