Executive Summary

The governments of the P5+1 and Iran could not finalize a comprehensive nuclear agreement by their self-declared deadline of November 24th. Instead, they agreed on another extension of the Interim Agreement for another seven months. This is a setback for Iran’s President Hassan Rouhani who had talked optimistically about a win-win agreement before November 24th.

The stakes for a nuclear deal could not have been any higher for President Rouhani and his domestic allies. For him, the prospects of normalizing Iran’s relationship with the United States starts with a nuclear agreement. Yet, this prospect also frightens the hardliners who see this prospect as a challenge to their political future.

The internal Iranian debate is as important as the nuclear negotiations themselves. The nuclear issue and the dispute with the United States are so embedded into the fractured domestic politics of Iran that Rouhani has to navigate the dangerous waters of factional politics very carefully.

So far, the supreme leader Ayatollah Ali Khamenei has endorsed President Rouhani’s nuclear negotiations, and has endorsed the extension of the talks for another six months. But should there be a serious challenge from the hard-liners, will Khamenei continue his endorsement and support for President Rouhani?

Even though the alignment of factional forces in the parliament, in the security and intelligence services, and in the Revolutionary Guards do not favor his message, President Rouhani still has powerful cards to play against his opponents, and a chance to forge a historic new chapter in the Islamic Republic’s foreign policy. He knows that the Iranian supreme leader spent a huge amount of his reputation on the former president Mahmoud Ahmadinejad, who returned the favor by publicly challenging him on numerous occasions, demonstrating Khamenei’s ineffectiveness as a supreme leader. Neither of the previous two presidents (Akbar Hashemi Rafsanjani and Mohammad Khatami) ever publicly defied Ayatollah Khamenei the way President Ahmadinejad did. If anything, it is Khamenei who needs Rouhani today.

Read full paper