The Islamic Republic of Iran, a 46-year-old revolutionary project, is in a crisis spiral. The latest round of popular protests began in late December 2025 with strikes by shopkeepers and the traditional merchant class in Tehran’s Grand Bazaar against the free fall of the Iranian currency and the distortionary system of multiple exchange rates. Initially focussed on economic grievances, the protests soon spread across the country, evolving into the biggest anti-establishment protests since the “Women, Life, Freedom” protests of September 2022.

When the protests broke out, Israeli Prime Minister Benjamin Netanyahu was in the US to seek support to relaunch an offensive against Iran’s ballistic missile capabilities. On his part, US President Donald Trump threatened to intervene militarily if Iranian authorities engaged in a violent crackdown, a move widely seen as emboldening protestors ranged against the regime.

Soon, the protests took an even more militant turn, with widespread destruction of public property, including arson attacks on mosques and government buildings. Even as the government ordered a complete shutdown of the Internet, the official narrative of the crisis made a distinction between “peaceful protesters” with legitimate demands and “armed terrorists” backed by external enemies. As protests petered out after two weeks, the death toll exceeded 2,000, including over 100 law enforcement personnel. The Islamic Republic faces its worst security scenario, with internal unrest amid geopolitical setbacks and the threat of US-Israeli military intervention. 

The “Women, Life, Freedom” protests, triggered by the death of Mahsa Amini while in the custody of Morality Police and led by youth and women, exposed the waning legitimacy of theocratic institutions. Amid a shift in belief systems across generations, Gen Z emerged as a driving force for change. As a result of US-imposed economic sanctions, as well as internal mismanagement and corruption, the Iranian middle class has become increasingly impoverished and has lost hope in the prospects of reforms. The Islamic Republic’s increasing reliance on coercion to maintain domestic order has reshaped opposition politics, displacing reformist and civil-disobedience strategies and strengthening the hands of more radical, diaspora-based forces aligned with the regime’s external enemies. 

The US has been preoccupied with the end of the Islamic Republic since it “lost”Iran in the wake of the 1979 Islamic Revolution and the humiliation of the hostage crisis, when a group of Iranian students seized the US embassy in Iran and held 52 Americans hostage for 444 days. The unsteady status quo between Iran and the US has unravelled amid a rapid shift in the regional balance of power in the aftermath of the October 7, 2023, Hamas attack on Israel. The dramatic failure of Iran’s security strategy of “forward defence” was exposed by the Israeli attack on Iran in June 2025, which came on the back of a sustained Israeli military offensive that decimated Iran’s regional allies, from Hamas to Hezbollah in Lebanon, and led to the collapse of Bashar al-Assad in Syria.

Trump backed Israel’s attack on Iran as part of his coercive diplomacy on the nuclear issue and carried out limited strikes, destroying Iran’s nuclear facilities. He followed his strikes by brokering a ceasefire between Israel and Iran. By threatening military intervention in the name of civilian protection, both the US and Israel are keen to push their geopolitical advantage to achieve their longstanding objective of regime change in Iran. Iran’s current predicament highlights how Iran’s modern democratic struggle for genuine freedom, dignity and political participation is shaped not only by ideological and intergenerational contestations within but also by the geopolitical overhang of US sanctions and pressures aimed at weakening the Islamic Republic.

On the novelty of Iran’s Islamic Revolution, Marxist historian Eric Hobsbawm wrote in TheAge of Extremes that it was “incomprehensible within a secularist frame of reference” because not only did the revolution owe nothing to the Western revolutionary tradition, but by linking the revolutionary ideology directly to the teachings of Islam, it overturned the classical indictment of religion as associated with the status quo and reaction. The Islamic Revolution raised the slogan “Na sharqi a gharbi, Jhomuri ye Islami” (Neither East nor West, but an Islamic republic), marking the success of Islamic ideology in mobilising the masses, engendering a clear break from the traditional Iranian monarchy, and forging an indigenous “Islamic” alternative to the Western models of modernity and the state.

Curiously, it was the absence of an Islamist political movement in Iran with a clear social and political agenda that led liberals, socialists, and Marxists in the opposition to accept Khomeini’s charismatic and ideological leadership against the Shah. For Khomeini, the purpose of political power was to realise the goal of the prophethood, that is, a community based on God’s law. In this political theology formulation, the state’s primary purpose is to protect the faith. Thus, internal and external enemies were portrayed as enemies of Islam itself.

The Shi’i Islam was institutionalised in the velayat-e-faqih (Supreme Guardianship of Jurist), who was to provide dynamic leadership and articulate the vision of Islam for the governance of all domestic and international affairs. The Supreme Leader theoretically claimed the allegiance of all Muslims who believe in the notion of imamah (leading people in prayer). However, the Republican dimension, represented by the popularly elected President and parliament, though under the oversight of a cleric-dominated Guardian Council, acknowledged that sovereignty lies with the people.

Under Khomeini, state-led Islamisation in education and cultural spheres was seen as necessary for Iran’s independence and Islamic identity. While a foreign policy driven by the export of the “true Islam” of radical social change and anti-imperial resistance targeting the Arab neighbourhood resulted in Iran’s complete isolation during the eight-year Iran-Iraq war.

Following Khomeini’s death and the imperative of post-war reconstruction, President Hashemi Rafsanjani prioritised economic development and openness to the world. As the roots of the country’s economic underdevelopment were widely debated, segments of the political elite advocated a comprehensive approach to economic and political reforms, thereby challenging the predominance of ideologically oriented political Islam.

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In 1997, President Mohammad Khatami achieved a landslide victory on a reformist agenda of empowering civil society, promoting individual freedom and pluralism, and defending the “rule of law” enshrined in the Iranian constitution. At home, he called for socio-political liberalisation under the rubric of “Islamic democracy”, while his proposal for “dialogue among civilisations” made a shift from defining Islamic identity vis-à-vis the Western “other” to one synthesising “Islamic-Iranian” identity formed over centuries of interactions among different civilisations.

At the turn of the century, a reformist challenge to clerics’ institutional power, the insecurity generated by the US invasions of Afghanistan and Iraq, and the then US President George Bush’s labelling of Iran as part of the “Axis of Evil” amid tensions over Iran’s nuclear programme led to the consolidation of an alliance between conservatives and the Islamic Revolutionary Guard Corps, who are responsible for protecting revolutionary order. They pushed back against rising popular demands for social-political liberalisation through a narrative of “cultural invasion”, securitising openness to the world.

In a 2008 speech to Iranian youth, Supreme Leader Ayatollah Khamenei argued that cultural interchange happens when a nation is prosperous and has a positive interaction with others; it enriches the national culture. “Cultural invasion happens when a particular group— political or economic—attacks a nation’s cultural institutions for the sake of political purposes”.

The victory of hardliner Mahmoud Ahmadinejad, a former member of the Basij volunteer militia affiliated with the Islamic Revolutionary Guard Corps (IRGC), over senior cleric and former President Rafsanjani, marked the IRGC’s arrival on the national political scene. In response to the US demand for “zero enrichment” on Iranian soil, a defiant Ahmadinejad administration appealed to anti-imperial nationalism and the right to “independent scientific and technological progress”, and expanded the country’s nuclear programme despite crippling international sanctions. 

While Ahmadinejad revived Khomeinist socialist populism, appealing to the lower-middle class and rural population, Khamenei’s concept of “resistance economy” substantially enhanced the IRGC’s economic profile at the expense of the private sector. The massive protests that followed Ahmadinejad’s 2009 re-election, which was challenged by his reformist co-contenders Mirhossein Mousavi and Mahdi Karroubi, cemented polarisation among the political elite and society over the influence of theocratic institutions.

The civic movement focussed on democratic participation and civil liberties was dubbed the Green Movement after the colours of Mousavi’s campaign. The Green Movement’s democratic consciousness and vision of an open society emerged in a dynamic dialogue with Western liberal ideas and values ascendant after the end of the Cold War.  It was a continuation and acceleration of the earlier Reform Movement, propelled by the urban middle class. Iranian middle-class identity was shaped by a growing popular pushback against the power of conservative theocratic leadership, which treated the population as passive subjects. While there has been a growing trend towards secular liberalism among the urban youth, even the more religious-minded sections have come to oppose the state’s instrumentalisation of Islam. 

The IRGC and Basij led the crackdown on the Green Movement, labelling it a “soft war”, a term with stark military dimensions that further justified the growing power of the security apparatus in the political and cultural spheres. However, the regime found it difficult to ignore societal aspirations for economic betterment when viewed through the prism of regime security and legitimacy. Hassan Rouhani won the 2013 presidential election on a platform of “prudence and hope” and “positive engagement” with the world. 

In the words of Javad Zarif, the architect of the nuclear agreement, the success of Iran’s diplomacy with world powers including the US, was a key step in transforming Iran’s traditional view of the international system as hegemonic and a threat to Iran’s independence and sovereignty into one “moving towards a state of mutual interdependence”, and where “the West’s once unchallenged monopoly over international relations and in shaping and directing developments has been broken.”

Overlapping internal and external crises

Trump’s unilateral withdrawal from the nuclear agreement, the reimposition of economic sanctions, and overwhelming demands on Iran’s nuclear, missile programme, and regional policies were met with defiance from Tehran. In the wake of the US’ “maximum pressure”, conservatives and hardliners consolidated power by reviving the politics of resistance. Since the 2020 parliamentary elections, the Guardian Council has excluded the majority of reformist and moderate candidates, undermining the legitimacy of electoral institutions that no longer permit meaningful contestation for power.

After Europe proved both incapable and unwilling to maintain economic ties with Iran despite US sanctions, Iran scaled up its nuclear programme as leverage for future negotiations. With US backing, Israel escalated sabotage attacks against Iranian nuclear facilities and a “campaign between wars” targeting Iranian weapon transfers to Lebanese Hezbollah and Iranian-backed militias in Syria.

Amid a deteriorating economic and security situation, conservatives and hardliners increasingly claimed security legitimacy based on Iran’s “strategic depth” provided by Iran’s support for Iraqi Shi’i militias who fought against ISIS, the Houthis in Yemen, Hamas in Gaza, and Hezbollah. International Affairs scholar Mohammad Ayatollahi Tabaar writes: “Under the existential threat of a draconian US sanctions policy, internal divisions abated. The White House’s policies helped forge a broad agreement among Iran’s elites that the only way to protect the country’s national interests was to secure the regime, which allowed the IRGC to present itself, for the first time in its existence, as the champion of Iranian nationalism.”

As economic shocks from US sanctions and internal mismanagement led to a shrinking middle class and growing economic inequalities, Iranian opposition politics became increasingly militant. The “Women, Life, Freedom” protests of 2022-23 had no ties to the reformist movement, which had failed to effect internal reforms and had been politically sidelined.

Gen Z, insisting on its freedom of lifestyle, not only rebelled against the state’s surveillance and the enforcement of moral codes but has also increasingly rejected the legitimacy and authority of religious leadership.

In the wake of these protests, Reza Pahlavi, the eldest son of the deposed Shah, styled himself as an “advocate for a secular, democratic Iran” in order to project himself as the main opposition leader who will play a key role in Iran’s future. His image and reach were boosted by a Persian-language digital and social media ecosystem funded by Iran’s regional enemies, including Israel. In April 2023, Reza Pahlavi visited Israel, where he participated in a Holocaust Memorial Day event alongside the Israeli Intelligence Minister Gila Gamliel and Prime Minister Netanyahu. Pahlavi argued that the visit was aimed at building a brighter future because he wants “the people of Israel to know that the Islamic Republic does not represent the Iranian people”.

During the Israeli attack on Iran in June 2025, while Netanyahu appealed to Iranians to overthrow the system, Pahlavi exuded confidence that the Islamic Republic was on the verge of collapse. “This is our Berlin Wall moment,” he said, calling for ordinary Iranians to seize the opportunity presented by Israel’s war and take to the streets, and for defections from the military and security forces. He repeated similar calls during the recent protests, while also appealing to Trump to intervene militarily.

Most observers of Iranian politics agree that pro-Shah slogans on the Iranian street indicate discontent with the Islamic Republic, and few inside Iran see a place for Pahlavi in a democratic future for Iran. On the other hand, such efforts by Israel and others to exploit domestic discontent only give credence to Iranian leaders’ claims that Iran’s enemies are waging a ‘cognitive warfare’ together with military attacks.

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Sensing geopolitical vulnerability of the Islamic Republic, ethnic separatist forces in Iran’s geographical periphery have become more ambitious in their goals and strategies, while leveraging external support. In December 2025, Jaish al-Adl, a Salafist militant group responsible for the murder of dozens of Iranian security personnel and citizens in Sistan-Baluchestan Province in recent years, rebranded itself as the “Popular Fighters’ Front”. The new entity claims to bring together several mostly dormant Baluch groups and presents itself as part of a broader Iranian opposition rather than a purely Baluch separatist force. The protests in Kurdish-majority provinces in western Iran were marked by deadly clashes and involved Iranian Kurdish groups based in Iraq. Notably, Iran’s ethnic minorities fiercely oppose the idea of the return of the Pahlavi monarchy, which had a supremacist attitude toward non-Persian ethnic groups.

Given that ethnic minorities inhabiting the peripheries of most states in West and South Asia have complex cross-border connections, Iran’s neighbours worry that chaos resulting from external military intervention will inevitably affect their internal and border security. Notably, Iran’s Persian Gulf neighbours, concerned about being caught in the crossfire between the US and Iran, convinced Trump to stand down. For now, protests have dispersed following a crackdown, and Trump is holding his fire, but the Islamic Republic will need to make dramatic changes if it is to escape the vortex of crisis. However, the Iranian establishment may just as easily turn to greater securitisation at home and limited survivalist pragmatism towards enemies.

Deepika Saraswat is Associate Fellow, Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi.