How radical can Iran's president go?

By Paul Hughes Thu Nov 3,12:16 PM ET

TEHRAN (Reuters) - Iran's new President Mahmoud Ahmadinejad appears determined to pursue a radical agenda -- but analysts ask whether he will be allowed to stay on a path that risks paralysis of the state and confrontation with the West.

"The pressure is growing inside the system to contain him and to pass these four years as quickly as possible without too much damage," said Iranian political analyst Mahmoud Alinejad.

But Ahmadinejad, a former Revolutionary Guardsman who served behind enemy lines in the 1980-88 Iran- Iraq war, appears in no mood to be contained after three months of the four-year term.

Last week he sparked international condemnation by calling for Israel's destruction, further isolating Iran at a time when the U.N.'s atomic watchdog is considering sending Iran's nuclear file to the U.N. Security Council for possible sanctions.

This week his Foreign Ministry announced it was recalling almost half of its ambassadors and senior diplomats, more than 40 in total, many of whom are perceived as moderates who favored better ties with the West.

On Wednesday he angered parliament by nominating a little-known figure with no oil background to run the oil ministry of OPEC's No. 2 producer. His previous choice, a close ally, was vetoed by lawmakers in August for lacking experience.

Such actions, which have provoked sharp criticism at home and abroad, are no more than the fulfilment of Ahmadinejad's campaign pledges, analysts said.

"The haste is surprising, with his broomstick approach, but not the policy itself," said Anoush Ehteshami, director for the Center of Middle East and Islamic Studies at Durham University.

"He promised sweeping changes and he's bringing them in."

The son of a blacksmith whose humble image scores well with Iran's mass of devout poor, Ahmadinejad wants a clean break with the relative moderation of domestic and foreign policy under predecessors Akbar Hashemi Rafsanjani and Mohammad Khatami.

"He feels the ideology of the (1979 Islamic) revolution was lost and betrayed and he wants to break with this 16-year trend toward moderation," said Alinejad.

His determination to purge the diplomatic corps and make a trusted ally head of the Oil Ministry is firm because "he feels very strongly the time has come to clear the Rafsanjani/Khatami presence from key ministries," said Ehteshami.

But, asked another senior political analyst in Tehran, "how is he going to replace the accumulated years of experience which these officials have in such a short time?"

Parliament, added the analyst, who declined to be named, was almost certain to veto Oil Ministry nominee Sadeq Mahsouli, throwing oil policy into further limbo.

"It's not just reformists who are criticizing him, he's rapidly losing friends," he said.

In making his appointments Ahmadinejad has relied more on personal trust than qualifications, lawmakers complain.

The cabinet is peppered with fellow former Revolutionary Guards and he has brought in members of Tehran City Council, where he was mayor before his election win, as senior advisers.

Rumors abound of the influence of his religious mentor Ayatollah Mohammad Taghi Mesbah-Yazdi, a hard-liner who advocates isolation from the West. Aides have denied the president takes his orders from the cleric.

Ahmadinejad's appointments of experienced figures to economic posts have been greeted with relief among investors, but his own pronouncements on the economy, such as suggesting interest rates should be lowered by decree irrespective of soaring inflation, have caused consternation.

Since June the Tehran Stock Exchange has shed 25 percent of its value and capital flight has mushroomed.

Diplomatic spats have multiplied, with informal trade bans placed on British and South Korean goods and barbs traded with traditional ally Italy.

"It's chaotic. The stock market has crashed, the budget deficit has ballooned and international pressure is building," said the senior political analyst in Tehran.

While Ahmadinejad's political inexperience may partly be to blame, his apparent unwillingness to heed counsel urging moderation suggests an inner determination, analysts said.

"His coming to power was quite independent of traditional power centers so he feels independent," said Alinejad. "He's not concerned about international reaction, protocol and so on."

Supreme Leader Ayatollah Ali Khamenei, who wields ultimate power in Iran, has so far urged those criticizing Ahmadinejad to give the government more time.

But his move to grant wide-ranging supervisory powers to the unelected Expediency Council, an advisory panel headed by Rafsanjani, was widely interpreted as an attempt to clip the young president's wings.

Most think pressure on Ahmadinejad will force him to compromise and moderate, unless external pressure forces the political system to rally around him.

"I think he will run into the sand," said Ehteshami. "He will have to compromise, but the prospect of conflict is always a way out, rallying support by fanning crisis with the outside world."

(Additional reporting by Alistair Lyon)