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A Hovercraft in This Week's Naval Exercises2055 GMT: Sedition Watch. Mohammad Reza Khatami, a prominent reformist and the brother of the former President, has issued a public statement challenging the "false, baseless, and repetitive claims" in the report sent to Parliament, claiming a foreign-backed plot at "velvet revolution" after the 2009 Presidential election.

2045 GMT: Sanctions Watch. Lawyers for Iran’s Central Bank are preparing to file a motion in a New York federal court to release nearly $2 billion of frozen funds at Citigroup Inc.’s Citibank unit.

The assets were frozen in 2008 after a group of 1,000 victims of international terrorism sought the money as partial payment for a $2.7 billion judgement made against Tehran for its alleged role in the 1983 bombing of a Marine Corps barracks in Beirut that killed 241 people.

2035 GMT: Irony Watch. A snippet from the Tehran Friday Prayer, via Fars:

Tehran's Provisional Friday Prayers Leader Ayatollah Seyed Ahmad Khatami lashed out at the regional states for suppressing and torturing peaceful protesters. "Some Middle-Ages torturing is exercised in a number of regional countries at present," Khatami said during the second sermon of his Friday Prayers in Tehran today.

"In Bahrain we are witnessing people are tortured by the security forces backed up by Saudi Arabia," he said.

1655 GMT: Budget Watch. Voice of America reports that the Government's budget for 2012/13 will not be ratified until next year. Only two months has been approved, with Minister of Economy Shamseddin Hosseini favouring a "shadow budget" to tide over the Government.

The Government missed the deadline earlier this month to submit its full yearly budget to the Parliament.

1645 GMT: Book Corner. The Islamic Republic has been ordered to pay a 55,000 Euro (about $71,500) indemnity for failing to attend the 63rd Frankfurt Book Fair.

1639 GMT: (Preventing) Remembrance of the Dead. Officials have banned mourners from visiting the grave of renowned poetess Forough Farrokhzad.

1630 GMT: The House Arrests. Prominent cleric Mehdi Taeb has offered a novel explanation for the detention of Mir Hossein Mousavi and Mehdi Karroubi, kept under strict house arrest since February. Taeb said the two men demanded to be arrested, for fear of attack by the Iranian people: "Staying alive is the Islamic Republic's biggest gift to them."

1540 GMT: A Glitch in the Friday Prayers. Khabar Online reports that the Governor of Hamedan Province in northwestern Iran had to cut short his address at Friday Prayers when the crowd started chanting against the "deviant current" of President Ahmadinejad's Chief of Staff, Esfandiar Rahim-Mashai, and 1st Vice President Mohammad Reza Rahimi.

1525 GMT: Economy Watch. Iran's Statistics Center has declared that the unemployment rate for March 2010-March 2011 was 13.5%>.

1515 GMT: Rafsanjani Watch. An update on the blocking of the website of former President Hashemi Rafsanjani....

Initially we reported, from Peyke Iran, that the filtering was brief (see 0707 GMT). However, Rafsnajani's brother Mohammad Hashemi has said that the suspension is more serious: “The company providing services to Ayatollah Rafsanjani’s site called and said they’ve been ordered to cut services to the site. Fifteen minutes later, the site was out of service."

Hashemi said it was not yet clear who ordered the cut-off.

The website is currently off-line.

1500 GMT: Elections Watch. As registration closed, Minister of Interior Mostafa Mohammad Najjar announced that 5283 people, including 393 women, applied for candidacy for the Parliamentary elections in March.

1440 GMT: Tehran Friday Prayer Update. We opened today, "Expect an emphasis on sedition", and Friday Prayers leader Ayatollah Ahmad Khatami did not disappoint, with his praise of the regime rallies of 30 December 2009 which defeated the "seditious movement" and the “sworn enemies of the Islamic Republic [who] showed support for the seditionists from day one".

Khatami continued, “During the sedition after the [2009 presidential] election, the [then] UK Prime Minister supported rioters on seven occasions and the UK-funded media spoke in their support on 175 instances.”

1430 GMT: Tough Talk of the Day. Press TV keeps up the drumbeat from the naval exercises: "Iran's Navy Commander Rear Admiral Habibollah Sayyari has reiterated that the country can easily close the Strait of Hormuz should such a necessity arise".

Reuters swallows the propaganda bait:

Iran will fire long-range missiles during a naval drill in the Gulf Saturday, a semi-official news agency reported, a show of force at a time when Iran has threatened to close shipping lanes if the West imposes sanctions on its oil exports.

Iran has long-range missile systems including the Shahab-3, which could reach Israel and U.S. bases in the Middle East.

In the past week it has threatened to stop ships moving through the strategic Straight of Hormuz if sanctions are imposed on its oil exports over its disputed nuclear program, increasing tension in a long-running standoff with the West.

"The Iranian navy will test several kinds of its missiles, including its long-range missiles, in the Persian Gulf on Saturday," Admiral Mahmoud Mousavi, deputy commander of the Iranian navy, told Fars news agency.

The United States and Israel have said they do not rule out military action against Iran if diplomacy fails to resolve a dispute over the country's nuclear program, which Tehran says is peaceful but the West says is a cover to build bomb.

0950 GMT: Espionage Watch. The mother of Amir Mirzaei Hekmati, the Iranian-American detained since August in Tehran on espionage charges, has rejected his "confession" --- made on State TV and in court --- claiming it was made under duress.

Behnaz Hekmati says her son, Amir, a former U.S. military translator, was in Iran to visit his two grandmothers.

Prosecutors have asked for the death penalty for Hekmati, whom they claim was working for the CIA to infiltrate Iranian intelligence.

0930 GMT: The Politics Behind The Propaganda. Writing for The Diplomat, Meir Javedanfar considers "Iran's Imperfect Trip for Obama":

If at any point after sanctions were imposed, Obama tried to limit the damage of high energy prices by then waiving sanctions (something the new legislation allows him to) then he’d be stepping into another trap, one of looking “weak” on Iran. Any Republican opponent would revel in the opportunity to present Obama as both the man who wrecked the economy, and then the leader who “chickened out” against Iran’s rulers.

Obama therefore has no choice now but to push ahead –-- the U.S. Congress has ripped out its reverse gear. But in doing so, he may be damned if he moves forward, and damned if he doesn’t.

So, are Iran’s leaders right to congratulate themselves for upping the ante by issuing the challenge over Hormuz? Certainly, if Obama doesn’t want to see his already uncertain electoral chances sink in the Persian Gulf then he will need to tread carefully.

But having laid a political mine for Obama, Iran’s leaders will need all their navigational skills to avoid falling into their own trap.

0800 GMT: Currency Watch. For the fourth day, the Iranian rial is hovering around the 15200:1 mark vs. the US dollar, just below its record low of 15390:1 set last week.

Tabnak expresses concern, however, that while the world price of gold has been falling sharply, the rate for gold coins has not moved in Iran. That would indicate that Iranians are continuing to seek the security of gold rather than holding Iranian currency.

0750 GMT: Sedition Watch. Speaking in Ilam in western Iran, President Ahmadinejad has hailed the success of the Iranian nation in defeating the enemy's plots in December 2009.

Alef, which can often be critical of the Ahmadinejad Government, closes ranks today by featuring the commentary of Mohammad Reza Bahonar, the Deputy Speaker of Parliament, proclaiming the "epic win" against "oppression" in the pro-regime demonstrations after the 2009 Presidential election.

0745 GMT: Unity Watch. Ayatollah Mesbah Yazdi, the leader of the Islamic Constancy Front, has put out a reassuring line about talks with other conservatives and principlists to establish a unified front before March's Parliamentary elections.

Mesbah Yazdi spoke of "efforts to reduce differences", warning that "foreign and domestic enemies are like a wounded snake that elections are seeking to create divisions and tensions".

For months, the Islamic Constancy Front, generally seen as supportive of President Ahmadinejad, has been unable to reach agreement with the umbrella "7+8" Committee. One of the sticking points has been the Constancy Front's insistence on exclusion of representatives of Speaker of Parliament Ali Larijani and Tehran Mayor Mohammad-Baqer Qalibaf.

0707 GMT: CyberWatch. Peyke Iran reports that the website of former President Hashemi Rafsanjani was briefly blocked on Thursday. No explanation was given by Iranian authorities for the filtering.

0705 GMT: Sedition Watch. Ayatollah Ahmad Khatami adds a nice touch to this week's drumbeat about the 2009 "sedition" against the Islamic Republic, as he says, "It will never end": "There was a 'velvet revolution' against Imam Ali as well."

Imam Ali, Shi'a's first Imam, was attacked and killed in the 7th century.

0615 GMT:

After a while, the "news" from Iranian State media is almost hypnotic in its predictable patterns. Something like this....

1. Our military is far tougher than their military.
2. But they are still very nasty, with their threats, their seditions and their sanctions.
3. Don't worry, we are selling lots of our oil and natural gas.
4. Did we happen to mention war and seditions?
5. Many, many candidates have registered for the next elections.

Of Press TV's latest 12 stories, four are on the muscular 10-day military exercise --- "Naval Drills Show Iran Military Might" --- two are on the prospect of a US attack, with the Russian Ambassador to the UN and Republican Presidential candidate Ron Paul sounding the warnings; four are on oil, with Iran vanquishing sanctions through new foreign customers; and one is on the elections. Only an announcement from Iranian Foreign Minister Ali Akbar Salehi of the "expansion of ties" with China offers any distinction.

Expect more of this today, but with the emphasis on sedition. This is the 2nd anniversary of the regime's counter-rally, three days after the display of opposition on the religious day of Ashura unsettled Iran's leaders, and all this week has been building to the declaration of how the Iranian people showed their love for the Islamic Republic and turned back a foreign-backed attempt at velvet revolution.

Tehran Friday Prayers will offer the headline proclamation, but look for other top Iranian figures to put out flourishes of rhetoric. None of this, of course, will mention Iran's current tensions over the economy and the political in-fighting in advance of March's Parliamentary elections.