China Economy Weekly: Rail Projects, Inflation, International Trade Links

China Clears Inter-city Rail Projects: The National Development and Reform Commission on Friday approved inter-city rail transit networks covering more than 2,000 kilometres to accelerate regional integration.‬

The network runs across central China, mainly in Henan province, and is expected to link nine cities with its 496 kilometres.‬ It also includes alterations to railways across the Pearl River Delta region, with a length of 1,478 kilometres, and to metro lines in Xi'an, the capital city of northwest China's Shaanxi province.

China This Week: Deadly Mudslides, Pollution Crackdown, Nuclear Weapons Promise

China, Switzerland to Ztart Free Trade Talks: China and Switzerland agreed on Friday to start discussions on a free trade agreement, as the two states celebrate their 60th anniversary of diplomatic ties.‬

‬ Chinese President Hu Jintao and his Swiss counterpart, Doris Leuthard, witnessed the signing of the memorandum of understanding. Switzerland has become China's major trade partner in Europe, and Leuthard said the two states should boost cooperation in finance, education, culture, environmental protection, tourism, and international affairs.

China's July Inflation: China's consumer price index (CPI), one of the main gauges of inflation, rose in July to its highest level since October 2008, boosted by rising food prices after widespread floods.

The CPI was up 3.3% in July from a year earlier, 0.4% higher than the rise in June. It has now exceeded the 3-percent full-year target ceiling the government set in March. However, economists said the acceleration in CPI growth was a temporary result of the floods.

The Producer Price Index, a major measure of inflation at the wholesale level, grew 4.8% year on year in July, 1.6% lower than June and 2.3% lower than May.

China's Consumer Confidence Edges Up : China's Consumer Confidence Index stood at 109 in the second quarter, up one point from the first quarter.The reading in the second quarter was the fifth consecutive quarterly rise.

China calls for more investment with ASEAN: Bilateral investment between China and the Association of Southeast Asian Nations (ASEAN) is low compared with trade, Yi Xiaozhun, vice minister of China's Ministry of Commerce, said Friday.

In 2009, bilateral investment between China and ASEAN nations totaled $10 billion, a sharp contrast with the $213 billion of bilateral trade, said Yi, attributing the low investment to the fragmented infrastructure within the China-ASEAN region.

Sri Lanka Co-operation China: Visiting Sri Lankan Foreign Minister G.L. Peiris, on his first official visit to China since taking office in April, pledged Thursday to boost economic and trade cooperation with China.

Sri Lanka appreciates China's support in constructing education and medical facilities, he said.

Sri Lanka's civil war ended in May 2009 after the the rebel Liberation Tigers of Tamil Eelam was defeated by government troops.

Zimbabwe Seeks Economic Links in East China: Zimbabwe hopes to further its economic and trade co-operation with east China's Anhui Province, said visiting Zimbabwean President Robert Mugabe on Thursday.

Zhang Baoshun, secretary of the Anhui Provincial Committee of the Communist Party of China, said that Anhui and Zimbabwe, which were economically complementary, had reached consensus on co-operation in agriculture, mining and infrastructure.

China Investment in Chile: China attaches great importance to economic cooperation with Chile and is committed to boosting mutual investment between the two countries, Lu Fan, the Chinese ambassador to Chile has said.

In the first half of this year, bilateral trade reached $10.9 billion, an increase of 58.9 percent compared with the same period of 2009, and Chilean exports amounted to $7.65 billion.

The Supplementary Agreement on Trade in Services of the Free Trade Agreement between China and Chile took effect on 1 August, and negotiations are underway on a supplementary agreement on investment.

Brazil Agricultural trade with China: Brazil wants to boost trade with China in agricultural products, and will export more pork to and import more fish from China in the next few years, Brazilian Agriculture Minister Wagner Rossi said Thursday.

Automobiles, Home Appliance Subsidies Spur Chinese Spending: Chinese government subsidies for purchases of automobiles and home appliances have boosted consumer spending and bolstered the national economy, the Ministry of Commerce said Thursday.

China rolled out the subsidy policies for rural consumers last year. In the first seven months of 2010, the government paid out 9.57 billion yuan ($1.41 billion), lifting sales in rural regions to 83.82 billion yuan (about $12.5 billion), up 240% from a year ago.

China State Enterprises Grow: The assets in China's centrally-administered state-owned enterprises (SOE) reached 2.01 trillion yuan ($297.40 billion) by the end of June, up 10.71% from 2008, China's state-owned assets regulator said on Thursday.

Nearly a quarter of the SOEs have state-owned assets over 10 billion yuan each, while six have state-owned assets over 100 billion yuan.

Housing Market Regulation to Continue: Chinese Vice Premier Li Keqiang said Friday that the government would continue to regulate the housing market and resolutely crack down on speculative property investment.

He said the government would continue to increase the supply of affordable housing for low-income families to consolidate the effects of the regulation over the past months.

Housing prices in major Chinese cities rose 10.3% year-on-year in July, slower than the 11.4% growth in June.

Turkey Inside Line: Ankara's Ramadan Message to Israel, Chemical Weapons against Kurds, Relations with Iran, and Turkey's Gaza Probe

Ankara's Ramadan Message to Israel: On Wednesday, Israeli Prime Minister Benjamin Netanyahu wished all Muslims an "easy" month of Ramadan. Although this message was meant for the Palestinians, the first response came from Ankara. Prime Minister Recep Tayyip Erdogan's ruling party, Justice and Development Party (AKP), excluded Israel's envoy Gabi Levi from the guest list for Eid al-Fitr, the annual dinner marking the end of Ramadan.

AK party chairman of foreign relations committee, Omer Çelik, said:

The reason for not inviting the Israeli ambassador is not on a personal level but rather a symbolic act against Israel's policies.

Anyone who is unjust or inequitable can not pass the threshold of the Justice and Development party’s headquarters.

The Israeli Foreign Ministry's response came quickly:

Once again it appears that Erdogan is initiating an escalation and searching for it. We will behave responsibly and not be pulled into the Turkish sword dance.

Ankara "Used Chemical Weapons": A report from Hamburg University Hospital concludes that eight PKK (Kurdistan Workers' Party) members killed last September were murdered by “the use of chemical substances.”

MPs from Germany's Christian Democratic Union party and the Green party have been pressuring the government to take an action against Turkey.

MP Andrej Hunko urged the German Foreign Ministry to file a complaint with the Organization for the Prohibition of Chemical Weapons in The Hague.

Turkish-Iranian Relations: After Brasil signed a decree that the country will abide by United Nations sanctions against Iran, Ankara has decided to continue its close relationship with Tehran.

On Wednesday, Turkey's Energy Minister Taner Yildiz said that the country will support gasoline sales by Turkish companies to Iran, despite U.S. sanctions.

Tupras, Turkey's sole refiner and gasoline exporter, which buys 33 percent of its crude from Iran, declined to say whether the company had traded with Tehran. However, a Tupras official said, "For us, Iran is more important than America, because we get crude oil from them. We don't get anything from America."

Meanwhile, Ankara denied a report in Italian daily Corriere Della Sera that it will "send sophisticated weapons, rockets and guns to Syria that will end up in Lebanon", with the Iranian army delivering weapons to Hezbollah. Ankara denied these rumours.

"The claims mentioned are without basis," said a senior foreign ministry official.

Turkey's Own Probe: On Thursday, the AFP news agency reported that Turkey had set up its own inquiry into Israel's raid on the Freedom Flotilla on 31 May.

AFP says PM's Office will "investigate the attack and the treatment the activists faced" and present its findings to the United Nations committee of enquiry. committee.

On the same day, Turkey's Foreign Minister Ahmet Davutoglu again blamed Israel:

No one else can take the blame for killing civilians in international waters. Israel has killed civilians, and should take the responsibility for having done so.

The Latest from Iran (14 August): Returning to the Streets?

1800 GMT: Economy Watch. Kalemeh reports that the unemployment rate has risen across Iran by 3.5% since last spring. In 26 of the country's provinces, the average is now 14.6%.

1745 GMT: Political Prisoner Watch. Labour activist Pedram Nasrollahi has been sentenced to four months in prison for “acting against national security” and “propaganda against the system by joining the women’s council”.

Kurdish painter Mokhtar Houshmand, the secretary of the Marivan Society of Visual Arts, remains in prison after his detention order was renewed for a month. His family has reportedly been denied a meeting or talking with him on the phone. The family has also been prohibited from talking to the media.

1735 GMT: The Hunger Strike. Kalemeh reports that five political prisoners who recently ended a hunger strike were threatened by the director of Evin Prison to six months in solitary confinement. Those warned were journalists Ali Malihi, Bahman Ahmadi Amouie, Keyvan Samimi, and Kouhyar Goudarzi and Ashura protester Gholamhossein Arashi. 4 of them are journos, Arashi is a Ashura protester, severely beaten in prison.

1725 GMT: Spinning Bushehr. Washington has tried to convert the news that Russia will supply the fuel needed to make Iran's nuclear plant at Bushehr operational --- finally, after repeated delays --- into a case that Tehran does not need to carry out its own uranium enrichment.

White House spokesman Robert Gibbs said, "Russia is providing the fuel, and taking the fuel back out....(This) underscores that Iran does not need its own enrichment capability if its intentions, as it states, are for a peaceful nuclear program."

1510 GMT: The President's Right-Hand Man (cont.). How significant is the movement against Ahmadinejad's Chief of Staff Esfandiar Rahim-Mashai? An EA correspondent summarises:

*Javan News --- connected with the Islamic Revolution Guards Corps --- now quotes Hassan Firouzabadi, chief of the General Staff, Habibullah Asgarowladi, secretary of the "conservative" Front of the Followers of the Path of the Imam, Ayatollah Kaabi, a member of the Association of Teachers and Researchers of Qom, and Hojatoleslam Moe'tamed as condemning Rahim-Mashai's statements about "the school of Iran," which they call "nationalist" and a threat to the international and Islamist character of the Islamic Republic.

*Jomhouriye Eslami writes in an editorial that "support of higher authorities [Ahmadinejad] for Rahim-Mashai makes the situation worse".

*Ayatollah Mohammad Yazdi: "Once more Mr. Mashaei has involved himself in discussions not worthy of him and has made wrong and unsuitable statements....It is not to the benefit of the regime, the office of the Presidency and the person of the President --- who has always been in the line of the leader and a supporter of religious foundations --- that his chief-of-staff engages in expert discussions about issues about which he is ignorant and harms his own dignity and those related to him even more."

*Alef News accuses Rahim-Mashai of "eclecticism" and condemns his statements about "human beings having the capacity to become God".

* MP Ali-Reza Zakani warns of a "new discord", likening Mashaei's statements with statements of former Prime Minister Mehdi Bazargan "who confessed that his conflict with His Holiness the Imam [Khomeini] was that we want Islam for Iran, but the Imam wants Iran for Islam".

1420 GMT: Shutting Down Green Media. A week after it was launched, the website of the new Green channel, Rasa TV, has been filtered by the Ministry of Intelligence.

1410 GMT: Challenges to the President (cont.): MP Ahmad Tavakkoli has criticised Mahmoud Ahmadinejad for disregarding the laws ratified by the Parliament and the Expediency Council.

Tavakkoli accused the president of intransigence, and said, “I am sorry that the president values his personal interpretation too much.”

MP Parviz Sorouri also criticized the President, “Any law that is ratified should be implemented. The president is not in a position to say whether a particular law is correct or not."

1230 GMT: But Those Other Friday Prayers Might Be A Problem....

Away from Ayatollah Jannati's Tehran Friday Prayer, trying to deflect attention from problems for the regime, other sermons point to, well, problems for the regime.

In Qom, Mohammad Saeedi indirectly criticised the President while bolstering Ayatollah Khamenei, saying someone who manages the country has to follow the Supreme Leader as the representative of Prophets. Saeedi declared everyone has to abide to the laws ratified by Parliament and approved by the Guardian Council.

Elsewhere, alongside condemnation of US sanctions and praise of Lebanon's Sayyed Hassan Nasrullah for his stand against Israel, there were attacks on the President because of his aide Esfandiar Rahim-Mashai's "Iran principle", placing Tehran as a source of emulation ahead of Islam. In Mashhad, Ahmad Alamolhoda said any ruling against the Supreme Leader is obsolete. In Kashan, Abdolnabi Namazi directly said Rahim-Mashai's presence disturbed the Iranian clerics and people.

1200 GMT: International Front. Not sure what to make of this....

Alaeddin Boroujerdi, the head of Parliament's National Security Commission, claims that the Vienna group (US, France, Russia, International Atomic Energy Agency) has accepted the Iran-Brazil-Turkey statement on uranium enrichment, so there is no necessity for Brasilia and Ankara to join talks with the "5+1" powers of the US, Britain, France, Russia, China, and Germany.

1155 GMT: Put-Down of the Day? Khabar Online claims a large banner with President Ahmadinejad's picture was removed from the Qur'an exhibition at Tehran's Grand Mossalla.

1145 GMT: Oil Squeeze. Alireza Mir-Mohammad Sadeghi, the deputy to Minister of Oil Mirkazemi --- a target of Khabar Online for "wrong policies: --- has allegedly said that 12,000 oil managers are on the verge of retirement.

1045 GMT: Getting Jannati's Line Right. Press TV gives the proper spin to Friday's Friday Prayer by Ayatollah Ahmad Jannati, the head of the Guardian Council, after recent difficulties over his speeches. Jannati, without re-stating the "$51 billion" coup allegation, warned against the discussions with the US:

You have forgotten what they (Americans) have done, you think they have changed…. They are the same….When they flash a green light it is [always] chicanery and a scam.

Jannati continued:

They think the Iranian people will give in under sanctions and adversities.…but the West's problem is that they do not know the Iranian nation and do not know who they are dealing with.

1025 GMT: The President's Right-Hand Man. The conservative Resalat devotes its main article to the "unacceptable statements" of Ahmadinejad Chief of Staff Esfandiar Rahim-Mashai.

The newspaper says the comments provide a welcome excuse for conservatives to attack the Government and demands, "Mr Ahmadinejad, let the passengers without a ticket get off the (Government) train!"

Key MP and Government critic Ali Motahari goes farther and harsher, claiming that the thinking of the President and his followers about Islam is like the Forghan group who killed his father, Ayatollah Motahari, in 1979.

Motahari alleged that Ahmadinejad's and Rahim-Mashai's ideas do not comply with Islam. According to the MP, the President is neither a conservative nor a reformist, but because he is supported by the Supreme Leader, other clerics support him as well.

The Motahari's call for resistance: a MP must decide by himself, not according to the Supreme Leader's opinion. He strengthens the demand with the regret that MPs should have protested clearly against the Kahrizak abuse and the allegation that Ahmadinejad's refusal to implement laws is a sign of dictatorship.

1015 GMT: Three Islamic Revolution Guards Corps soldiers have been killed in clashes with members of the Kurdish separatist group PJAK.

1000 GMT: More on the "Jannati Line". Alongside Ayatollah Jannati's appearance at Friday Prayers, there is support for him from Esmail Kowsari, deputy head of the National Security Council, who claims the Majlis was informed about the documents for Jannati's claim of the $51 billion US-Saudi-opposition coup plan. Kowsari says the proof is in the Ministry of Intelligence.

MP Zohreh Elahian, a member of Parliament's National Security Commission, claims the documents will be given to prosecutors.

0915 GMT: Challenging Ahmadinejad. Khabar Online devotes its "headline" news to an analysis by Professor Pirouz Mojtahedzadeh, who criticises the President's foreign policy.

Mojtahedzadeh claims Iran's "turn to the East" led to damage to its nuclear energy programme, as Russia delayed completion of the Bushehr reactor, and to a quadrupline of imports from China.

(Last night, Voice of America claimed the cost to Iran of the Bushehr reactor was now close to $1 billion.)

The professor adds a significant comparison: during the Presidency of Hashemi Rafsanjani (1989-1997), the east-bound policy was advisable, but it has now led Iran "to this mess". Instead of battling with one set of foreign powers (US, Europen Union) and making advances to another (Russia, China), Tehran should follow a balanced policy towards all.

0455 GMT: Execution (Ashtiani) Watch. Human Rights Watch has condemned the treatment of Sakineh Mohammadi Ashtiani, sentenced to death for adultery and presented on national TV on Wednesday with her "confession".

HRW women's rights researcher Nadya Khalife said, “The men who run Iran apparently have no shame at all, first pronouncing the barbaric sentence of death by stoning and then resorting to a televised confession. Under the circumstances there is every reason to believe that this so-called confession was coerced."

0430 GMT: We begin this morning with a look to the future, provided by an EA correspondent:

Roughly 3 weeks to Qods Day and a lot of chatter, whether Mousavi and Karroubi will invite the people to protests.

Another idea is going to the streets on the 27th of every month in accordance with Article 27 of the Constitution, assuring freedom of assembly.

Qods (Jerusalem) Day is the annual commemoration of Palestine. Last September, opposition supporters used the occasion to press their demands publicly in one of the largest post-election rallies.

Meanwhile....

47 Baha’is Currently In Prison
Following the recnet sentencing of seven Baha’i leaders in Iran to 20 years in prison each, Diane Ala’i, the representative of the Baha’i International Community has said that there are currently 47 members of the Baha’i Faith are inside Iranian prisons.

According to Ala’i, the Baha’is are not facing charges of mohareb (enmity with God), which carry the death penalty. They are accused of “acting against national security”, “participating in illegal groups", and “propagating the Baha’i Faith”.

Ala'i added that the seven leaders have been moved from Evin Prison to Rajai Shahr Prison in Gohardasht, Karaj. Families have been able to visit the prisoners once every two weeks for 10 minutes. They are allowed to see male relatives one week and female relatives the next, so the entire family cannot meet at the same time.

Ala'I said the verdicts for the seven Baha’i leaders have not yet been served in writing.

Cyber-Challenge

The Persian 30mail site, which features news roundups, has launched a competition for IT specialists to write a programme feeding news from Green sites to e-mail accounts and mobiles in Iran. Programmers selected in the first round receive $1000, and the finalist wins another $4000.

The Latest from Iran (11 August): Coded Messages

1245 GMT: The President's Man. Definitely looks the battle within is escalating....

Ahmadinejad Chief of Staff Esfandiar Rahim-Mashai has hit back at the criticism of Iran's military chief, General Hassan Firouzabadi, that the aide's remarks on Iran and Islam "are a crime against national security" (see 0650 GMT).

Rahim-Mashai announced in a meeting with IRIB managers and editors of state broadcasting that he will file a suit against Firouzabadi to enlighten the public: "I'm forced to follow these ugly accusations by judicial means."

1235 GMT: The Human Rights Lawyer (cont.). Mohammad Mostafaei has rejected the allegation of financial fraud, made by the Tehran Prosecutor General (see 0900 GMT): "If they want to sue me because of the accounts of my clients, they have to do the same with all marjah (senior clerics) who have charity accounts."

1210 GMT: MediaWatch. Green Voice of Freedom has launched a Turkish edition.

1200 GMT: The Hunger Strike: A relative has said Keyvan Samimi will continue his hunger strike in Evin Prison until the 15 who have taken food are transferred to "general" Ward 350. Families have still not been allowed to visit the detainees.

1145 GMT: More on "Election Manipulation" Revolutionary Guard Audio. A follow-up to our feature on Tuesday....

In an interview with Rah-e-Sabz, Alireza Alavi-Tabar assesses the divisions between "pragmatic" and "radical" hard-liners in light of the audio.

0945 GMT: Calling the Broadcaster to Account. The International Campaign for Human Rights in Iran has launched a campaign against the head of Islamic Republic of Iran Broadcasting, accusing him of cooperation with Iran's intelligence service and violating human rights.

ICHRI's Hadi Ghaemi said Ezatollah Zarghami should be dismissed because he worked with Government interrogators in the production of televised confessions and trials and the "Fitna" (Sedition) series against leading opposition figures and activists, as well as the distortion of cases of post-election victims such as Neda Agha Soltan.

0925 GMT: Culture Corner. The Supreme Leader has reportedly cancelled conference on “Pursuit of Job Security and Social Welfare for Cinema Professionals”.



A prominent cinema director told Rooz, “Agents from the Intelligence Ministry have called for the cancellation of the gathering through threatening phone calls. Finally, they told us that the office of the Supreme Leader was against this gathering” and that, if the event went on as scheduled, it would be confronted harshly.

The Supreme Leader is not having much luck, however, with his recent proclamation against music.

Melody and Safoura Safavi, two sisters from the Iranian band Abjeez (Persian slang for sisters), have responded with less than enthusiasm. Safoura Safavi said, "I think it's -- I'm sorry to say this, to use this word -- but it's ridiculous. I mean, you can't prohibit something like music. And of course, it's a way to control because, in a way, saying that, it shows how strong the force of music is [in Iran]...."

0920 GMT: Political Prisoner Watch. Last week, there were reports that Farah Vazehan had been sentenced to 15 years in prison. However, a reliable source has told RAHANA that Vazehan has been sentenced to death for mohareb (war against God).

0900 GMT: The Human Rights Lawyer. Mohammad Mostafaei, the lawyer forced to flee Iran because of possible arrest, may be in Norway, but the Iranian authorities haven't forgotten him....

Tehran Prosecutor General Abbas Jafari Dowlatabadi has said that Mostafaei is accused of "financial fraud."

0830 GMT; Shortages and Violence. Rah-e-Sabz claims that people in Ahwaz in southern Iran are trying to stage protests in front of the Governor's office because of bad water, rising youth unemployment, and unpaid wages. A seven-member Government commission has been sent from Tehran to the port offices of Abadan and Khorramshahr amidst accusations of fraud and corruption.

Three days of clashes between security forces and residents in Dahdez in Khuzestan in southwestern Iran have allegedly killed seven people. The protests are over shortages and problems in basic services.

Turkey, despite claims of increasing supplies, reduced its gasoline exports to Iran by 73 percent in July, according to data from the Istanbul Exporters Association of Chemical Materials. Turkey supplied 2.5 percent of Iran's total gasoline needs during the month.

Japan's Toyota Motor Corporation has suspended auto exports to Iran indefinitely to avoid any potential repercussions in the US market. Toyota exported about 4,000 automobiles to Iran in 2008, but only 250 in 2009.

0840 GMT: Iran-US Talks? Set aside Ahmadinejad's rhetoric, and the interesting passage in his interview with The New Yorker is his renewed call for discussions with the US on regional issues in the Middle East and Central Asia.

Mixed, even confusing, signals continue from the Supreme Leader's office on the possibility. Former Foreign Minister Ali Akbar Velayati, the foreign policy advisor to Ayatollah Khamenei, has denied a report that he "welcomes" nuclear talks with the US. However, Iran has never rejected talks, and "negotiations with other countries such as P5+1 member states (the US, Russia, France, Britain, China, plus Germany) and the Vienna group (the US, Russia, France, and the International Atomic Energy Agency) -will be carried out while considering the Islamic Republic's rights".

0710 GMT: Washington's Human Rights Intervention. Secretary of State Hillary Clinton on Tuesday called on Iran to release all political prisoners, expressing alarm about the fate of several specific detainees who are "in danger of imminent execution". She specifically named Jafar Kazemi, Mohammad Haj Aghaei, and Javad Lari.

0820 GMT: The Regime's Backfiring Culture of Fear. Writing in The National, Michael Theodoulou considers how the regime efforts to quash the opposition through allegations of foreign-supported regime change --- recently through the statements of the head of the Guardian Council, Ayatollah Ahmad Jannati --- have run into difficulties.

0800 GMT: The Brazil Front. Brazil has accepted UN sanctions against Iran, despite concerns over measures and its proposal with Tehran and Turkey on talks over uranium enrichment.

Brasilia has also made a formal offer of asylum to Sakineh Mohammadi Ashtiani, the Iranian woman sentenced to death for adultery.

0730 GMT: Political Prisoner Watch. Agence France Presse has picked up on the claimed ending of the hunger strike by 16 detainees in Evin Prison.

A Revolutionary Court has sentenced reformist journalist Badrolsadat Mofidi to six years in prison and banned her for five years from journalism. Mofidi was convicted of "conspiring to commit crimes and propaganda against the regime".

Mofidi, the secretary of the Iran Journalists Association, was imprisoned for more than five months after the June 2009 election before being released on bail.

A website has described the abuse of Kurdish activist Ahmad Bab, who was detained last September.

0705 GMT: Opposition Messages. Former President Mohammad Khatami, marking Nationalist Journalists' Day, has said that the real sedition in Iran is spreading awkward lies. He compared the rigged election to the CIA-backed coup of 1953 and declared, "We should learn from this oppression."

Mehdi Karroubi has issued a message for the holy month of Ramadan, "Let us pray to God to save our valiant prisoners, held by the rule of oppressors."

0700 GMT: Talking Tough. Former Revolutionary Guard commander General Hossein Kan'ani Moghadam has said that Iran has dug mass graves to bury U.S. soldiers in preparation for an American attack.

0650 GMT: The President's Right-Hand Man. Hmm, this is getting interesting....

Khabar Online reports --- passing on news or making mischief? --- the alleged comment of Iran's head of armed forces, Brigadier General Hassan Firouzabadi that the remarks of Ahmadinejad Chief of Staff Esfandiar Rahim-Mashai "are a crime against national security".

0620 GMT: Ahmadinejad's Uncoded Message. Meanwhile, Press TV and Khabar Online has picked up on the President's interview with The New Yorker, featured in EA yesterday.

Press headlines Ahmadinejad's claim, "US Worst Suppressor of Media, People", but adds his offer to “help bring the US out of the crises” it has created in Iraq and Afghanistan: “Iran is ready to help them, based on justice and respect....I hope there is someone with an ear among US politicians to understand this and brings no more deaths to the people in Iraq and Afghanistan as well as US soldiers.”

Khabar --- Speaker of Parliament Ali Larijani's outlet --- features Ahmadinejad's claim that western politicians "have no idea about Iran" as "all my opponents are free". The President is also quoted as saying that Iran's people are friends of Jews, but Europe should take back its Jews, or give them a place in Alaska, the USA, or Canada.

0600 GMT: We begin this morning with several intriguing, if sometimes coded, messages.

The easiest to decipher is a letter from Mir Hossein Mousavi, issued last Thursday and now translated by Khordaad 88. Mousavi, referring to Iran's Constitutional Revolution in the early 20th century, makes clear that the "dictatorship" of authorities is not acceptable, even when it is carried out in the name of religion. We post the text in a separate entry.

We have also posted an analysis of a more mysterious intervention from former President Hashemi Rafsanjani. In a section of his memoirs which has "randomly" appeared on his website, Rafsanjani recalls how the first President of the Islamic Republic, Abolhassan Banisadr, was forced to step down. But could the passage also be a reference to Iran 30 years later?

And then an EA correspondent re-reads a statement by Tehran Mayor Mohammad-Baqer Qalibaf on the recent "I am the Rule of the Prophet" fatwa by the Supreme Leader. Earlier this week we noted this as a defence of Ayatollah Khamenei amidst the pressure on him.

Our correspondent, however, thinks that Qalibaf may have amore complex message, supporting the Supreme Leader but also pointing out limits on his authority. He notes these passages from Qalibaf's interview:

In my view, the Exalted Supreme Leader is not articulating authorities that go beyond the boundaries of religious jurisprudence, and the ceiling for these authorities is the limits of the religious law (canon), the expediencies and the preservation of the Islamic system and public interests....

The meaning of this fatwa is that, if a person obeys and follows the Supreme Leader's governmental rulings but based on his own reasoning and personal understanding questions the correctness of those rulings, according to the Supreme leader's own fatwa we cannot accuse that person of being against velayat-eb faqih. In fact, the Supreme Leader has emphasized that the standard is not to embrace every view expressed by the Supreme Leader. We can only call a person anti-velayat-e faqih when that person opposes the vali-ye faqih's (i.e., the Supreme Leader's) governmental rulings, not when he does not subscribe to every view that is articulated by the Leader. This fatwa guarantees the rights of the citizen under the Islamic system. Therefore, a person who follows another source of emulation should only follow those fatwas that have been issued by that source of emulation....

With this fatwa, the Supreme Leader has in fact expanded the insiders' geography and gave it a greater depth....We now understand what the Supreme Leader means when he talks about the people who fall inside the system. We now understand and have become more convinced that his approach is one that is geared toward attracting the maximum number of individuals.

And Qalibaf also may have also had a message for those who tried to use the Supreme Leader's words to go after political opponents, inside as well as outside the Iranian system:

The same people who until today would accuse anyone that they wanted of being anti-velayat-e faqih (clerical authority)...were using that label as a political tool to strengthen or weaken other actors or eliminate them from the political scene altogether.

The Latest from Iran (1 August): Pressure on Ahmadinejad & Khamenei

1930 GMT: New rhetorical developments in the "War with Iran" corner --- we've got a separate analysis of today's appearance by US military chief Mike Mullen on a Sunday talk show.

1850 GMT: Women, Off Your Bikes. The Friday Prayers leader of Mashaad has reminded women that it is forbidden for them to cycle.

1845 GMT: Terrorist Alert. Fars News reports that a "terrorist" group, made up of Baha'i followers, has been rounded up in Tehran.

1700 GMT: Water Squeeze, Electricity Squeeze Oil Squeeze. Rah-e-Sabz surveys the crisis in supply of clean water, electricity, and gas, noting the restriction in operations of many plants.

NEW Iran Analysis: Hyping the War Chatter — US Military Chief Mike Mullen Speaks
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Iran Analysis: Looking Back on the 1980s (Verde)
Iran Music Video Special: The Award-Winning “Ayatollah, Leave Those Kids Alone”
Iran’s Persecution of Rights: The Pursuit of Lawyer Mohammad Mostafaei (Shahryar)
The Latest from Iran (31 July): Past and Present

1655 GMT: Academic Corner. Advar-e Tahkim Vahdat, the student alumni organisation, has warned of widespread purges of professors with the destruction of social sciences and condemned the prison sentences of Bahareh Hedayat, Ali Malihi, and Milad Asadi.

1650 GMT: More Pressure on the Supreme Leader. Ayatollah Mohsen Kadivar, who recently made a prominent call for the removal of Ayatollah Khamenei, has declared that the "greatest coup d'état" in Iran has been "made by the first person of the country".

1635 GMT: Khomeini Intervention. Seyed Hassan Khomeini, the grandson of Ayatollah Khomeini, has appealed for "an end to hate and rancour as means to solve problems".

Khomeini was meeting members of Islamic associations in Golestan Province.

1620 GMT: Today's All-is-Well Alert. The managing director of the National Iranian Oil Distribution Company (NIODC), Farid Ameri, has said that despite the imposition of new UN sanctions, Iran's gasoline reserves have increased by 15%. Ameri insisted that Iran is capable of supplying its gasoline needs.

1610 GMT: Political Prisoner Watch. Student activist Hosein Sarshoumi has been arrested in Isfahan.

1530 GMT: Counter-Sanctions. The Ministry of Culture and Islamic Guidance has issued a directive, "Registration of orders for printing goods, tools and machines from Britain is not allowed."

1520 GMT: Economy Watch. Reports claims that German experts hired for a metro project in Isfahan have left because of unpaid wages.

1515 GMT: Tough Talk of the Day. Yadollah Javani, the political director of the Islamic Revolution Guards Corps: if attacked, Iran will take the war beyond its geographical borders.

1450 GMT: Economy Watch. Parleman News reports that unemployment has risen in 21 of Iran's 30 provinces.

The official unemployment rate is now above 10% in 22 provinces.

Mehr News reports that Iran's non-oil trade imbalance has increased, with imports now at a 2:1 ratio to exports.

1430 GMT: Political Prisoner Watch. Kalemeh says that four hunger strikers (we had reported on one, Payman Akbari-Azad, at 1405 GMT) have been moved to a clinic at Evin Prison.

1415 GMT: Western Reporters, Stay Away. Deputy Minister of Culture and Islamic Guidance Mohammad-Ali Ramin, in addition to slamming Iran's "irresponsible press" (see 1400 GMT), has proclaimed, "The Western media will be excluded from this year's [national] press exhibition. We will not allow the presence of those Western media which are vain, dishonest and beguiling and consider themselves as the ultimate media sultans of the world."

Ramin said exceptions would be made for Western media "which are fitting and independent" to attend the 25 October exhibition.

Earlier this year, some Western journalists used purported coverage of a Tehran conference on uranium enrichment to publish other first-hand stories of Iranian life and politics after the 2009 election.

1410 GMT: Put-Down of the Day. Activist Zahra Rahnavard on Ayatollah Jannati, head of the Guardian Council, after his speech this week defending the Supreme Leader and claiming a US-Saudi $50 billion plot for regime change: "Even a cooked chicken laughs at his words."

1405 GMT: Political Prisoner Watch. RAHANA reports that Payman Akbari-Azad, in the 7th day of his hunger strike, has been taken to a hospital outside Evin Prison.

1400 GMT: Complaint of the Week. Mohammad Ali Ramin, the Deputy Minister of Culture and Islamic Guidance, commented on Wednesday in a speech at Imam Khomeini International University blasted the "undesirable situation of the press": "The government is criticized and even disparaged on a daily and weekly basis by at least 500 to 600 publications in the country in the strongest, sometimes insulting, terms."

Ramin also said there are too many publications in Iran:

In the period before me, the supervisory committee would issue 60 licenses during a one-hour meeting. We are now facing problems and some people have licenses over which there is no supervision....Some of these publications which have obtained licenses are in the hands of individuals with no money and they become dependent on investors. The government must help them become absorbed into parties and organizations.

In another section of the speech, Ramin supported the Supreme Leader's "I am the Rule of the Prophet" fatwa and went even further: "The [Leader] has the position of surrogate of the Imam Zaman [the 12th "hidden" Imam] and on his behalf must manage the world, in other words the imposition of God's proof upon humanity during the time of absence [of Imam Zaman]."

Ramin concluded, "We must find a way for the velayat-e-faqih system to manage the world."

0720 GMT: Trouble for the Fatwa? With clerical reaction in Iran awaited to the Supreme Leader's declaration of authority (see 0645 GMT), Grand Ayatollah Sistani, the leading Shia cleric in Iraq (and a native of Iran), has given a less than warm reception.

Sistani said that, to rule the country, velayat-e-faqih and the Supreme Leader's authority must be approved by the majority of loyal followers. He added that if the rule of a marja (senior cleric) differs from that of the Supreme Leader, it is still valid if it is based on welfare for all, unless it contradicts the Qukran and tradition. (http://www.khabaronline.ir/news-80110.aspx)

Meanwhile, Hojatoleslam Hossein Ebrahimi of the Assocation of Combatant Clergy has warned that all three branches of Government are in the hands of hardliners. He added, however, that those hardliners are menaced by internal conflicts and said reformists have not been eliminated. (http://www.khabaronline.ir/news-77980.aspx)

0710 GMT: The Battle Within. The dispute between Parliament and President is now affecting war veterans, according to Rah-e-Sabz. The site claims that the law to support victims of chemical warfare in the Iran-Iraq War has not been implemented by the Government.
(http://www.rahesabz.net/story/20523/)

MP Musalreza Servati has warned that if the Government does not approve the funds for the Tehran metro system, the relevant ministers will be impeached. (http://www.rahesabz.net/story/20470/)

On a different front, MP Esmail Kousari has challenged the Government's "soft" stance on hijab: any current which wants to supersede hardliners is not hardline at all. (http://www.khabaronline.ir/news-78645.aspx)

Alireza Marandi has asked, "How can a government that does not implement Majlis legislation... pretend to be able to run the country?" (http://www.khabaronline.ir/news-79922.aspx)

However, the most serious challenge may have come from Mohammad Nabi Habibi, the leader of the conservative Motalefeh party. Amidst growing confrontation with the President's inner circle, Habibi has struck back at Ahmadinejad's recent declaration that only one party, the Velayat Party, is necessary.

Habibi claimed that the lack of parties menaces Iran and said the "propaganda system" of a party that presents its aims as those of the people is wrong.

Then he warned, "In many cases government have been toppled because of this." (http://www.khabaronline.ir/news-80102.aspx)

0700 GMT: Watching the Clerics. An EA correspondent tells us of a development with the Supreme Leader's "I am the Rule of the Prophet" fatwa.

Grand Ayatollah Makarem Shirazi, who was approached by Ayatollah Khamenei's staff before the fatwa was issued, has published answers to questions about velayat-e-faqih (clerical supremacy) on his website. (http://persian.makarem.ir/estefta/?it=899&mit)

Makarem Shirazi's responses could be a big clue as to whether the Supreme Leader's assertion of authority will be accepted by senior clerics. Curiously, only some of the answers have been published by Fars News. (http://www.farsnews.net/newstext.php?nn=8905080088)

0645 GMT: Slapdown to Obama. Iran has responded to President Obama's call on Friday for the release of three Americans, detained for allegedly walking across the Iran border last year, by insisting that the trio will be tried.

0630 GMT: Oil Salvation from Beijing? Deputy Minister of Oil Hossein Nokreqhbar Shirazi claimed Saturday that Chinese investment in Iran's energy sector has risen to $40 billion.

There was a downside, however. Shirazi admitted that Iran's oil exports to China have fallen 30% this year.

0600 GMT: Catching up with the news while on the road....

Political Prisoner Watch

Brazil has offered asylum to Sakineh Mohammadi Ashtiani, the woman sentenced to death --- initially by stoning before this was recently revoked --- for adultery.

Peyke Iran publishes pictures of detainees' families who protested in front of the Tehran Prosecutor General's office on Saturday.

Inside Evin Prison, telephone contact has been re-established with political prisoners in Ward 350, where detainees protested last week over ill treatment of them and their families by prison guards. There is still no word, however, of several prisoners who are reportedly in solitary confinement and on hunger strike.

RAHANA posts a report on Majid Dorri, one of the hunger strikers.

Economy Watch

Green Voice of Freedom writes about the metal industry of Kerman, "destroyed" by Chinese & Pakistani imports.