The recent attack on the British embassy was apparently carried out by members of the Iranian Revolutionary Guard Corps (IRGC). The U.S., and most Western nations, considers this outfit to be a terrorist organization. The IRGC is more than just the "royal guard" of the Iranian dictatorship. Originally founded to do the clerics' dirty work, and keep an eye on the Iranian armed forces, and population in general, the IRGC has grown to become a state-within-a-state. The IRGC not only has 150,000 armed members, but also controls billions of dollars-worth of businesses inside Iran, and runs numerous terrorist operations outside the country. The IRGC has not been shy about its foreign activities, and boasts of its efforts to destroy Israel and the United States. The IRGC scoffed at the American countermeasures, but the sanctions have real bite. The U.S. has enormous control over the international banking system, and has developed ways to use this power. Once the United States tells the world's banks that they will be cut off from access to the U.S. banking system if they do business with the IRGC, the Iranians suddenly find that many of their criminal activities are much more difficult, if not impossible, to carry out. IRGC bank accounts are frozen, and some assets are seized. The American sanctions would be accompanied by U.S. government officials detailing IRGC crimes, and abuse of the international banking system. This tends to convince many, if not most, major international banks that it was not worth the trouble, and risk, to do business with the IRGC. This makes it more expensive for the IRGC to operate. It's also very embarrassing, if only because sanctions also identify IRGC leaders that are to be denied the right of travel to many parts of the world. The listing, and the sanctions, would also interfere with Iran's nuclear weapons program, which is largely controlled by the IRGC. In response to all this external pressure, the IRGC has sought to increase its power within Iran. The attack on the British embassy, which was criticized by some of the senior clerics (who hold veto power over most government decisions), demonstrated how the IRGC can, increasingly, do whatever it wants. This is what bothers many outside Iran, because if Iran gets nukes, the IRGC will control them.
Despite IRGC willingness to help out, the Iranian government has decided to pull back on support for the pro-Iran government in Syria. Months of demonstrations, which continue despite the use of troops and deadly force, have weakened the Syrian government. Apparently Iran is trying to limit its losses here, as it would still like to have an arrangement with a new Syrian government to supply pro-Iran Shia Hezbollah in Lebanon. That's a long shot, but is a possibility.
The government claims that its anti-drug efforts have led to more than twice as many drug gangs being taken down this year than last. At the same time, the government admits that, in addition to the growing supplies of opium, heroin and hashish from Afghanistan, more LSD, cocaine, methamphetamine and new synthetic drugs are coming in from the West, or being manufactured in Iran. In addition to several million addicts in Iran, more and more Iranians are being caught outside Iran, working to export drugs from Iran. There has always been a lot of smuggling in and out of Iran, and now a major item being moved is drugs. On the Afghan border, the traffic goes both ways, with drugs coming into Iran and weapons and other contraband going to Afghanistan. The Afghan border has been a war zone for over three decades, as the government fights the smugglers. There are currently over a thousand casualties a year in the Afghan border, because the Afghan smugglers are armed and willing to fight past the border guards to deliver their valuable cargoes.
Satellite photos of the November 12 explosion at a military base outside the capital show much more damage than previously thought. Iran continues to describe the explosion as an accident; it is also part of a growing number of similar incidents. These include the untimely deaths of key personnel in the weapons development organizations. There appears to be an organized effort to disrupt Iranian weapons development, especially their ballistic missile and nuclear bomb programs. Iran officially denies that this is the case.
December 8, 2011: The government displayed what appeared to be an American RQ-170 jet powered UAV, which landed intact in Iran two weeks earlier. This UAV showed up in Afghanistan and South Korea two years ago. The U.S. Air Force then admitted that this was the RQ-170, a high altitude reconnaissance UAV developed in secret by Lockheed-Martin during the previous decade. It has a 26 meter (80 foot) wingspan. The RQ-170 is believed to be a replacement for the U-2 and a supplemental aircraft for the larger Global Hawk (which has a 42 meter wingspan.) RQ-170s have been operating over Afghanistan, Pakistan and Iran for at least a year. Exactly why this UAV came down, and how damaging the loss of aircraft and sensor technology is, won't be known for years. Losses like this have occurred for decades, and do have an impact. For example, U.S. cruise missiles that crashed in Pakistan (on their way to Afghanistan) in the 1990s clearly influenced the design of a Pakistani cruise missile. American warplanes that crashed in North Vietnam during the 1960s provided some tech for China and Russia, but nothing decisive.
December 4, 2011: The government claimed that it had intercepted the radio control of an American UAV and forced it to land in Iran. The U.S. later admitted they had lost contact with one of their UAVs in Afghanistan, something that usually happens because of equipment failures. Iran has been known to interfere with satellite signals (mainly to keep material from those with illegal satellite video receivers). Hacking an encrypted satellite signal to a UAV is quite another matter. Possible, but rarely done or even openly talked about.
December 3, 2011: France has decided to temporarily reduce the size of its embassy staff in Iran (which numbers about two dozen people.) This is in response to the recent attack on the British embassy. The British pulled all their diplomatic personnel out of Iran and ordered Iran to do the same with its diplomats in Britain.
December 1, 2011: The UAE (United Arab Emirates) has ordered 600 American bunker buster smart bombs. The UAE already has an advanced model of the F-16 to deliver such a bomb, and the only likely target is Iran.
November 30, 2011: Norway closed its embassy in Iran, but has not evacuated its diplomats yet.
November 29, 2011: In the capital, a mob of nearly a thousand young men invade the British embassy compound, causing extensive damage. The police simply stood by. Britain has been portrayed as an enemy of Iran for the last few centuries because the British have done to Iran what Iran has done to its neighbors for thousands of years (bully them and interfere with internal affairs). The Iranians do not like having the tables turned this way. Although Turkey, Russia and the United States have also done this sort of thing, the British have done it the most, and that makes the attack on the British embassy popular with many Iranians. Unfortunately for Iran, the rest of the world considers the attack on an embassy a major breach in international etiquette. This sort of thing (a government sanctioned attack on an embassy) rarely happens and it is universally condemned.
November 28, 2011: There was a large explosion in the west Iranian city of Isfahan. The explosion was near a nuclear facility and military base. Iran played down the explosion in the media.
November 27, 2011: Angry at British support for increased sanctions against Iran (because of the Iranian nuclear weapons program), the Iranian parliament passed a law ordering Britain to reduce the size of its embassy in Iran. Anti-British propaganda has been increasing in Iran over the last few months.
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