Iran's post-election situation seemed rather bleak for the pro-reformers (and for the West) after the election commission announced Ahmedinejad's landslide victory. But I am getting some conflicting reports on the situation, so bear with me, but I will try to summarize and analyze as best as I can.
After the election, Mousavi and Ahmedinejad both claimed victory. The state media then announced that Ahmedinejad had achieved a pretty stunning 62% of the vote, which is a number that really nobody in the West can seriously claim is or is not a good estimate of his actual support. Mousavi called foul, claiming that members of the election commission told him that he had a serious lead (around 58%) when the polls closed (which he claims had led to his claiming victory). After crying foul, Mousavi's supporters took to the streets, in defiance of Khameini's decree, and began protesting (which, of course, turned intio rioting with busses burning, shops breaking, etc). Obviously, there have been lots of clashes between protesters and police. Sometimes, protesters were broken up--sometimes, the police ran. Lots of people have been beaten up, arrested, probably killed.
Iran arrested Mousavi and put him under house arrest at some point, though he is clearly out now. Other reformists were also arrested, as was the Supreme Leader's daughter, who has at least sympathized with Mousavi's cause. I'm not sure what her status is, currently.
Iran cut off cell phone service to Tehran, and packed it with police. It has also tried to shut down all pro-Mousavi websites, but its Internet censorship team is not anything on part with China's, and they are largely failing to keep the ever-morphing mass of information from jumping around between different websites, twitter accounts, and whatnot. People are staying informed, and organized.
Some allegedly-leaked information from the Interior Ministry shows Ahmedinejad in third place after the election (even after apparent ballot-rigging, extortion and intimidation, etc). The numbers:
Mousavi (Independent Reformer): 19.1 Million (45.8%)
Kharoubi (Etemad-e-Melli): 13.4 Million (32.1%)
Ahmedinejad (Abadgaran): 5.7 Million (13.7%)
Rezai (Independent Conservative): 3.5 Million (8.4%)
If these numbers are true, they have incredible implications. First, the run-off vote would be between two reformers (with Mousavi the clear favorite), basically sealing a big victory (and relief) for the West in Iran. Second, Ahmedinejad's policies are so woefully unpopular that he would have the worst incumbent turnout in any presidential election I can even conceive of. Third, and finally: massive, systemic, planned fraud from the very top was designed to make sure this election went one way. If these numbers are true, then Khameini deeply feared the results, and with good reason. Such overwhelming (almost 80%) support for reformist candidates would put great pressure on him, and great support behind the President. He does indeed answer to a series of religious elites in Iran, and many of them actually care about Iran and its people (who knew!).
And the pressure from the electorate to void these results is starting to trickle into such elite circles. A group of influential Ayatollahs have called for the election results to be nullified, and the election to be re-taken in order to win the confidence of the Iranian people. I have heard scattered reports that there are election commission officials calling for a re-vote with better controls of irregularities. The West is finally coming out and making calls for investigations, although cautiously.
Today, Mousavi (somehow getting out of house arrest?) appeared in Tehran in front of (what an Iranian police officer said was) 1.5-2 million supporters, in defiance of the Supreme Leader and under explicit threat of deadly force. He has whipped Tehran into a fervor, and is trying to keep the energy up in order to keep the pressure on the leadership high. He has the momentum, and he knows it.
At this point, the Supreme Leader needs to seriously worry about losing control of Tehran and having to resort to an incredible massacre with the Revolutionary Guard. In order to try to assuage anger, he is actually calling for investigations into the "irregularities" cited by Mousavi.
This could be one of two things: first, he could actually be balking to pressure, and plans to call a new vote (it is unlikely he will flat-out declare Mousavi the winner). Second, and perhaps more likely, he will probably stretch out the investigation in the hopes that the energy of Tehranians will fizzle, and then declare that despite some irregularities, Ahmedinejad still won. The second path is dangerous--these youngsters are largely on summer vacation, and they don't actually have normal lives to return to in the next two months. Mousavi has almost nothing to lose, as he'll surely be thrown in jail of Ahmedinejad walks out of this with the win. That said, all these kids can threaten to do is give Iran an ever-increasing public relations scandal, and undermine Ahmedinejad's authority abroad. But will he care? Will the Supreme Leader? That is a question with bleaker possibilities.
But, frankly, there is hope. Mousavi and his band of youngsters have not only shaken up Iranian politics, they have changed the face of Iran to the West forever. Even if Ahmedinejad emerges with the presidency, the West shall always look to Iran's people with great sympathy, as their fight for liberty tugs our heartstrings. They share many of our values. They remind us of the best of ourselves. That, alone, may change the West's relationship with Iran--or at least its policy towards it. But, further, there is a chance that the Supreme Leader will decide that the safe route is a route of lower risk--one that does not involve such obvious lies and deception, but one that bends to the will of Iran's citizens, and allows Mousavi the chance to do what he can. Iran's religious leadership has weathered reformers before, and while Mousavi promises to be quite effective, it will weather them again: Khameini has very little to lose by sweeping in and playing hero to the Iranian people by using his hand to call a new vote and hand Mousavi the victory. In fact, he may decide that this moment in his legacy is one where he does, indeed, want to play the hero, rather than the villain.