Events in Iran continue to develop at a rapid pace. In a victory for protesters, Iran's top cleric denounced the election results:
"No one in their right mind can believe" the official results from Friday's contest, Grand Ayatollah Hossein Ali Montazeri said of the landslide victory claimed by Ahmadinejad. Montazeri accused the regime of handling Mousavi's charges of fraud and the massive protests of his backers "in the worst way possible."
"A government not respecting people's vote has no religious or political legitimacy," he declared in comments on his official Web site. "I ask the police and army personals (personnel) not to 'sell their religion,' and beware that receiving orders will not excuse them before God."
Meanwhile, protests continued. What is not at all clear is where this will all end up.
Veteran Indian diplomat turned analyst M.K. Bhadrakumar says we should be paying attention to the man behind the Mousavi campaign, longtime Iranian political fixture Hashemi Rafsanjani (depicted above in an Iranian cartoon from the 2005 election).
Mousavi's electoral platform...brought together so-called reformists who support former president Mohammad Khatami and ultra-conservatives of the regime. Rafsanjani is the only politician in Iran who could have brought together such dissimilar factions. He assiduously worked hand-in-glove with Khatami towards this end.
...For those who do not know Iran better, suffice to say that the Rafsanjani family clan owns vast financial empires in Iran, including foreign trade, vast landholdings and the largest network of private universities in Iran.

Like Mousavi, Rafsanjani was one of the founders of the Islamic Republic, and nearly became Supreme Leader himself when Khomeini died. He played a major role in negotiating an end to the Iran-Iraq War, and served as President during the 90s. Wikipedia describes him as a "pragmatic conservative" who is "autocratic" but socially moderate and economically liberal.
Read a little background on Rafsanjani and it becomes little mystery why Ahmadinejad's isolationist economic policies irk him. In 2003, Forbes published a story on Rafasnjani's wealth It's a fascinating story - Rafsanjani and his brothers have apparently gone within a single generation from being pistachio farmers, to being some of the richest men in the world.
The 1979 revolution transformed the Rafsanjani clan into commercial pashas. One brother headed the country's largest copper mine; another took control of the state-owned TV network; a brother-in-law became governor of Kerman province, while a cousin runs an outfit that dominates Iran's $400 million pistachio export business; a nephew and one of Rafsanjani's sons took key positions in the Ministry of Oil; another son heads the Tehran Metro construction project (an estimated $700 million spent so far).
Today, operating through various foundations and front companies, the family is also believed to control one of Iran's biggest oil engineering companies, a plant assembling Daewoo automobiles, and Iran's best private airline.
Bizarre historical sidenote: an import ban on pistachios by the EU in the late 90s triggered a mini-crisis between Rafsanjani's regime and the Western powers.
Since Rafsanjani controls such vast commercial interests, he has been angered by Ahmadinejad's war-mongering attitude on the world stage, which has served to isolate Iran diplomatically and economically, and by the efforts of the President and the Supreme Leader to consolidate power via the security services and the Revolutionary Guard. After running and losing against Ahmadinejad in 2005, he had his revenge when he was elected to the Chairman of the Assembly of Experts two years later, in a vote that was widely viewed as a blow to the Ahmadinejad-Khamenei alliance.
Here is a video showing some of Rafsanjani's criticism of the regime on economic grounds:
http://www.youtube.com/...
Rafsanjani's role in the election had become an issue by the time of the vote. As the Washington Post reports, Ahmadinejad, who had made fighting corruption a major theme of his campaign, openly attacked Rafsanjani in one of the major inflection points of the race. It was widely interpreted as a shot at Rafsanjani by Khamenei.
Ahmadinejad charged that Mousavi's campaign was backed by "corrupt" politicians such as Rafsanjani, whom he called "the main puppet master." Ahmadinejad also accused Rafsanjani, who served as Iran's president from 1989 to 1997, of turning himself and his family members into "billionaires" since the 1979 Islamic revolution.
This caused Rafsanjani to take another unprecedented step, issuing a letter "complaining that the country's supreme leader has remained silent in the face of "insults, lies and false allegations" by incumbent President Mahmoud Ahmadinejad."
At this point, it might be premature to say that Mousavi and Rafsanjani's gambit "backfired." The mass demonstrations of Monday and Tuesday proved that the reform agenda has broad support, and not just with the urban upper class. The opposition forces have succeeded in badly damaging Ahmadinejad's legitimacy.
The Guardian writes that Rafsanjani may be trying to organize an overthrow of Khamenei himself.
Following the ensuing storm over Ahmadinejad's apparent victory, al-Arabiya television reported Rafsanjani had resigned as chairman of the Assembly of Experts and of the Expediency Council, two key government bodies. This report remains unconfirmed.
More intriguing are similarly unsubstantiated claims that Rafsanjani is in the holy city of Qom, where he once studied and where he has strong links to a moderate clerical body, the Association of Combatant Clergy. Rafsanjani was said to be assessing whether he has sufficient votes in the 86-member Assembly of Experts to dismiss Ayatollah Ali Khamenei, the Supreme Leader and Ahmadinejad's chief patron. Under Iran's constitution, only the assembly has the power to do this.
The problem is that now that the opposition bloc has demonstrated their strength, it becomes hard to see an easy way forward. If Khamenei and Ahmadinejad stay in power, Iran will no doubt sink into turmoil in the near term. On the other hand, if they are deposed, it's easy to imagine the security forces that are loyal to Ahmadinejad revolting.
In another column, Kaveh L Afrasiabi suggests that, as improbable as it sounds, some kind of coalition government may be where we are headed.
The probability of new elections as requested by Mousavi and his reformist supporters, including former president Mohammad Khatami, is unlikely. Observers believe a more realistic scenario is the formation of a new script for Ahmadinejad's second administration in which an "all-inclusive cabinet" yek kabineh faragir will emerge, including representatives from the reformist camp.
A clue that this may be in the offing emerged in Ahmadinejad's post-election press conference when he invited his challengers to introduce lists of people for inclusion in the next government. He must now follow up on this initiative to appease the tens of thousands of mostly urban voters who opposed him and who are now chanting slogans against him in the streets.
Although it doesn't have the same ring as a total overthrow of the Islamic Republic, a government where liberal, modernizing elements have real power would be preferable to an autocratic government led to Ahmadinejad. But at this point, what happens next is anyone's guess.