Tehran commentariat seek to calm war fears as markets jitter

“If this system, with all its shortcomings and flaws, collapses, Iran’s fate would be far more bitter than it is now,” Khatami said at a meeting with journalists, artists and university professors, according to semi-official ISNA news agency.

"Separatism, foreign intervention, infiltrations, and the like would destroy Iran, and the only path to fundamental reform is one that is less costly and more beneficial than any other solution," the former reformist president added.

Khatami said public anger should not be confused with support for radical action.

“If we look beyond fleeting emotions and the anger stemming from the current situation, I believe the majority would choose reform,” he said.

Khatami’s remarks come as many Iranians appear to have moved on from the long-standing reformist–hardliner divide, with public discourse increasingly sceptical of gradual reform from within the system.

A survey conducted in 2024 and published in August 2025 by the Netherlands-based institute GAMAAN found that the majority of Iranians would vote for either a regime change or a structural transition away from the Islamic Republic, highlighting growing demands for political change across Iran.

Opposition rose to about 81% during the 2022 Woman, Life, Freedom protests, the survey said.

During the widespread protests which began in September 2022, sparked by the death of Mahsa Amini in police custody, demonstrators repeatedly called for the overthrow of the Islamic Republic.

The protests were quashed with deadly force, with at least 550 people killed by state security forces and thousands arrested according to rights groups.

The defendant, identified as Yaghoub Karimpour, a resident of Miandoab in West Azarbaijan province, was arrested by Iran’s intelligence ministry during the 12-day conflict between Iran and Israel earlier this year, the sources said.

Karimpour, born in 1984, was convicted of “corruption on earth” through alleged cooperation with Israel and the transmission of data, they added. He is currently being held in Urmia Central Prison.

According to the sources, Karimpour has denied the charges throughout his detention and trial, saying he had no links to Israel and had not passed any information. They said he told investigators that confessions attributed to him were extracted under coercion.

Iran’s judiciary has not publicly commented on the case, and Reuters was not able to independently verify the allegations.

Iranian authorities have intensified arrests, prosecutions and executions on charges of espionage or collaboration with Israel in the months following the brief war. Officials say the measures are necessary to safeguard national security, while rights groups say the trials often lack transparency and rely on forced confessions.

In recent weeks, Iran has carried out several executions linked to espionage allegations.

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  Iran says 2,000 detained over alleged espionage links

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  Iran executes student on charges of spying for Israel

Earlier in December, authorities executed Aghil Keshavarz, an architecture student, after convicting him of spying for Israel, state-linked media reported.

The Hengaw human rights organization said that at least 17 people have been executed in Iran this year on charges related to cooperation with Israel, 15 of them after the conflict.

Iranian officials have arrested hundreds of people since the war on suspicion of espionage or collaboration with Israel.

Many of the cases have been pursued under a law passed by parliament in October that broadened definitions of espionage and cooperation with “hostile states,” including Israel and the United States, and allows for capital punishment in a wide range of activities involving alleged information sharing.

“Our sources in Tehran now tell us that, in October, Khamenei decided to give the green light to the development of compact warheads for ballistic missiles,” the report said.

The report said Khamenei had previously blocked any move to enrich uranium to weapons-grade levels or to develop deliverable nuclear warheads, despite pressure from within Iran’s security establishment, particularly the Revolutionary Guards.

It said the June conflict with Israel marked a turning point, exposing weaknesses in Iran’s air defenses and allied forces, while highlighting the limits of its missile arsenal in a prolonged conflict.

“The only true deterrent that could save the Iranian regime in the event of a conflict against Israel and its US allies would be nuclear weapons,” the report said.

Enrichment still capped, for now

“At the same time, however, Khamenei would still not have authorised uranium enrichment beyond 60%,” the report said, adding that rumors persist of an undisclosed enrichment effort at a covert site not declared to the International Atomic Energy Agency.

It said Iran appears to be prioritizing warhead design over enrichment to reduce the risk of exposure to military strikes.

The report said that even if Iran chose to move quickly on enrichment, developing a deliverable warhead would take far longer.

“While enrichment to 90% would require only a few weeks if there were still enough working centrifuges, compact warheads remain a far more complex challenge,” it said, citing Pakistan’s experience in the 1990s, when years of testing and design work were needed before a viable compact warhead was achieved.

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  Iran's buoyant missile arsenal vexes Israel, analysts say

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  Iran has built missile power beyond pre-war levels, foreign minister says

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  Iranian nuclear scientists made covert visit to Russia for laser tech - FT

Missiles at core of deterrence

Iran’s focus on compact warheads is tied to its medium- and long-range missile force, which the report said proved decisive in forcing a ceasefire with Israel in June, even as Israel destroyed a significant number of Iranian missiles and launchers.

Recent contradictory reports over possible missile activity in Iran, later denied by state television, underscore the sensitivity around the country’s missile program and its role in deterrence.

The report said Iran could seek external assistance to shorten the timeline for developing compact warheads, noting persistent rumors within the Revolutionary Guards of cooperation with North Korea.

“Even access to previously tested warhead schematics would represent a major shortcut,” it said, while adding that cooperation beyond missile technology remains impossible to verify.

Iran has long said its nuclear program is peaceful and defensive, while Western governments accuse Tehran of keeping open the option of developing nuclear weapons.

The moment came during a live appearance by Vice President Jafar Ghaempanah on IRINN, Iran’s state television news channel.

Pressed repeatedly on the economy, Ghaempanah acknowledged that a roughly 30 percent decline in oil revenues, compounded by chronic energy shortages and the continued impact of sanctions, had sharply reduced government resources and damaged livelihoods.

Since the start of President Masoud Pezeshkian’s administration, he said, falling oil income had cut into production, deepened the budget deficit and left the state with far less room to maneuver.

The interview quickly drew attention online—not only for its substance, but for what appeared to be visible strain. Ghaempanah stumbled over basic facts, briefly referring to the June conflict with Israel as the “11-day war” and seeming uncertain about its timing, while at several points losing his temper as the interviewer pressed for specifics he struggled to provide.

Budget behind closed doors

The significance of the appearance became clearer the next day, when the government presented its annual budget bill to parliament in a closed-door session from which leaks soon emerged.

According to multiple reports—some echoed by state television itself—Hamid Pourmohammadi, head of the Planning and Budget Organization, told lawmakers that the government currently has no foreign-currency resources to support the proposed budget, sparking heated exchanges with MPs.

Leaked details indicate that next year’s budget will be around five percent smaller than the current one, an unusual move for a system long accustomed to expanding nominal spending even in difficult times.

That picture sits uneasily alongside public assurances from Economy Minister Ali Madanizadeh, who has claimed the draft was prepared with a near-zero deficit.

Crisis in plain sight

For years, large portions of Iran’s budget have been directed toward ideological and propaganda bodies, as well as institutions linked to powerful security organizations, even as basic services and productive investment have suffered.

Mehdi Pazouki told the reformist Rouydad24 website that budget deficits lie at the heart of Iran’s chronic economic instability. Inflation, he argued, is not a temporary shock but the outcome of sustained mismanagement.

Pazouki urged the government to privatize state- and military-owned companies and to halt the practice of allocating oil to military bodies to sell on the state’s behalf—steps that would challenge entrenched interests.

With oil revenues shrinking, energy shortages worsening and sanctions continuing to restrict access to hard currency, the state faces mounting limits on its ability to cushion economic pain.

Ghaempanah’s faltering television appearance was less an isolated embarrassment than a revealing symptom—one that briefly aligned official rhetoric with the economic reality the system usually works to conceal.

Speaking on Sunday, Ghalibaf warned that if the executive fails to address rising prices of basic goods, parliament would have a “duty” to take action.

But moderate voices in Tehran argue the episode is less about procedure than positioning.

“These remarks indicate a fundamental shift in relations between the presidency and parliament,” wrote the news website Rouydad24, arguing that Ghalibaf is recalibrating his role from co-manager of the system’s crises to its chief overseer.

By adopting an openly critical stance, the outlet said, Ghalibaf is seeking to distance himself from shared responsibility for deteriorating economic conditions while presenting parliament as an independent check on executive failure.

“If reshuffling occurs, parliament will claim victory; if not, impeachment becomes the ‘last unavoidable option,’” it wrote—placing political costs squarely on the government.

Moderate politician Hossein Nourani-Nejad said impeachment threats are being used to reshape the executive politically.

“The government is centrist, not reformist,” he said. “But the right is trying to gradually turn it into a conservative government.”

Parliament has already impeached and removed Economy Minister Abdolnaser Hemmati, with pressure building on ministers overseeing agriculture, roads and urban development, industry and trade, sports and welfare.

Parliamentary attacks have focused disproportionately on reformist or centrist ministers aligned with the government’s discourse.

Some lawmakers have gone further, openly calling for Pezeshkian’s resignation and even floating his impeachment on grounds of what they describe as “political incompetence.”

Most of those voices belong to the ultra-hardline Paydari Party and are closely aligned with Saeed Jalili, Pezeshkian’s rival in last year’s presidential election.

“That the head of another branch of power would threaten the president and government by invoking impeachment demands from a specific parliamentary minority is novel,” Esmail Gerami-Moghaddam of the Etemad-e Melli Party told Etemad.

By sharpening confrontation now, critics argue, Ghalibaf is seeking to shed collective responsibility for economic distress while signalling readiness for a future political contest—one in which blame, distance and “oversight” may matter as much as policy.

The backdrop is Ghalibaf’s own defeat to Pezeshkian in the last year’s presidential race—and widespread belief in Tehran that the coming years could bring major political shifts, creating incentives for senior figures to reposition early.

Deputy Speaker Ali Nikzad acknowledged the stakes, noting that if more than half the cabinet were removed or resigned, the government would lose its quorum.

He added, however, that “the position of the system”—a reference to Supreme Leader Ali Khamenei—is that the cabinet should complete its term.