Diplomats say that hardliners leading the regime have resigned themselves to a showdown with Europe and America over Irans nuclear programme and are prepared to accept sanctions as a price for continuing to enrich uranium. With oil at $50 (£28) a barrel, the regime is confident that the UN Security Council would be reluctant to implement sanctions that could cause a further rise in oil prices.
Khamenei (the Supreme Leader) and the hardliners think that the West will never allow Iran to enrich, the diplomat said. They see it as better to have the spat now and get on with the enrichment programme.
Neither of the two other leading candidates, Mostafa Moin, a reformist, and Mohammed Qalibaf, a former Revolutionary Guard officer, offer much hope for the future of negotiations between Iran and Britain, Germany and France, the EU3, to halt enrichment. Mr Moin is seen as likely to be railroaded by the regime, and a win for Mr Qalibaf would lead to the consolidation of Ayatollah Khamenei s conservative power base.
Iran insists that it has a right to enrich uranium. It says that it needs enriched uranium for electri-city. Britain and America say that Iran is seeking to make a nuclear weapon and is close to success. They are close to weapons capability, the diplomat said.
The purported extent of Irans nuclear programme was leaked to the West in 2002 by an Iranian dissident group. Under pressure, Iran halted its enrichment programme last November. Last month it admitted having processed 37 tonnes of uranium ore at the Isfahan conversion facility. Experts say that this could yield more than 91kg (200lb) of weapons-grade uranium, enough for five nuclear weapons.
The EU3 have favoured negotiations to resolve the crisis. Last month Iran agreed to pause its enrichment for two months so long as Europe produced a package of econo-mic and security benefits as an alternative.
Insiders say that even this two-month pause is under threat. America is threatening to put the issue before the UN Security Council and will push to penalise Iran if the negotiations break down.
The stakes were raised this month when Iran announced that it had successfully tested a motor for its Shahab-3 missile, a medium-range device potentially capable of carrying a nuclear warhead 1,200 miles.
During his election campaign, Hojatoleslam Rafsanjani has said frequently that Irans nuclear programme will be used for peaceful ends and be overseen by Western verification officials.
Many, however, see him as an unlikely conciliator. It was under an earlier presidency of Hojatoleslam Rafsanjani that the Bushehr nuclear power plant was built by Russians in the 1990s. In 2001, during a notorious Friday sermon, the cleric stated that just one nuclear weapon for Iran would end Israels threat to the region.
In fact, few Iranians display the enthusiasm for nuclear weapons that is felt in Pakistan or India. They fear that the possession of a nuclear bomb would entrench the hardline regime.
IRAN VOTE MAY GO TO SECOND ROUND
Election will choose a successor to Mohammad Khatami, who has served two terms but is barred from running for a third
If no candidate achieves at least 50 per cent of the vote, elections go to a second round
Hojatoleslam Rafsanjani is predicted to win 35 to 40 per cent of vote, meaning a run-off between him and the second most popular candidate is likely
Iranian elections have never yet gone to a second round
Turnout is expected to be 50 per cent the lowest since the Iranian revolution in 1979 in Tehran
