Prague, 7 April 1998 (RFE/RL) -- The detention of the Mayor of Teheran, Gholamhossein Karbaschi, cuts like a sword blow across the liberalization process started by Iranian President Mohammad Khatami.
Public prosecutors detained Karbaschi, one of Khatami's staunchest supporters, at the weekend on allegations that he used his position as mayor to embezzle funds.
A string of Karbaschi's aides had previously fallen victim to similar charges leveled by the conservative judiciary. These allegations may or may not be true, but most analysts see their real importance as appearing part of a drive by Iran's clerical-led conservatives to discredit the moderates. By jailing the mayor himself the conservatives have now struck directly into Khatami's inner circle.
The Iranian cabinet has questioned the legality of the detention, saying the charges against Karbaschi have an insufficient basis. Nevertheless the mayor is expected to face trial in the coming weeks.
Certainly the conservatives would seem to have the greater strength in any showdown: the judiciary, the Revolutionary Guards, the main body of the military, even a large section of the business community, must be considered close to the conservative Islamic hierarchy, under supreme spiritual leader Said Ali Khamenei.
By contrast, Khatami and his circle find their support mostly beyond the country's formal structures -- among the Iranian people themselves. The president is popular with ordinary Iranians, particularly the young who fear for their future at a time when declining world oil prices are putting extra pressure on the shaky economy. This popularity may deter any conservative move against the president himself.
The internal power struggle has key implications for Iran's international standing. Khatami's opening towards the United States early this year has been followed by a cautious but perceptible change of mood in Washington. In Europe, the European Union has moved to normalize relations with Iran, partly as a means of strengthening Khatami's hand at home.
However, the day of Karbaschi's detention, (April 4) spiritual leader Khamenei criticized the United States once again with characteristically bitter and colorful rhetoric. The following day the conservative parliament speaker, Ali Akhbar Nateq-Nouri, continued the anti-U.S. tone. But in his speech Nateq-Nouri called for greater cooperation between Iran and the EU, saying the misunderstandings between them are trivial. This differentiation reflects the fact that EU member states such as France are potentially big investors in Iranian energy projects, despite the U.S. economic sanctions against Iran.
But any concerted move against the moderates would inevitably send a negative signal to potential foreign investors. German-based economic analyst Hanno Sonntag of the Deutsche Morgan Grenfell investment advisers says that he sees no impact on the Iranian economy so far, but that investors would certainly pause to reflect if they perceived that the moderates were being ousted.
A spokesman for the British presidency of the EU would not comment on the developments in Tehran, saying they are an internal affair of Iran. But sources in London say that at a meeting of EU foreign ministers shortly before Karbaschi's detention, it was decided that EU officials would liaise with Iranian officials about the practical details of how the two sides should resume a dialogue.
The sources said there been no change in the EU position since then. However, in the long run the envisaged dialogue could hardly be expected to go ahead if the moderates surrounding Khatami are decisively undermined.