A former Iranian nuclear negotiator was acquitted Tuesday of spying charges but convicted of acting against the Islamic government in a case that has become a centerpiece in the feud between Iran's hard-line President Mahmoud Ahmadinejad and his top political rival. The light verdict for Hossein Mousavian appeared to be a setback for Ahmadinejad, who had branded the diplomat a "spy" and made a veiled reference to him and other critics of his nuclear policies as "traitors." Mousavian is a close ally of former president Hashemi Rafsanjani, a powerful figure in Iran's clerical leadership seen as a pragmatist. Allies of Rafsanjani have been increasingly public in their criticism of Ahmadinejad, accusing him of mismanaging the nuclear standoff in the West and lashing out against his rivals. The case against Mousavian from the start was seen as a part of the rivalry. Ahmadinejad implicitly accused Rafsanjani's camp of trying to influence the judiciary to acquit the negotiator. He vowed to stop them and expose his opponents as traitors, suggesting Mousavian had urged the West to toughen their stance on Iran in the nuclear dispute. After the announcement of the verdict, several dozen hard-line students protested outside the judiciary building and scuffled with police. The students chanted slogans against Mousavian, shouting "death to compromisers" and "the nuclear spy must be executed." There were no reports of injuries or arrests in the scuffles. Mousavian was accused by the Intelligence Ministry of passing classified information to foreigners, including the British Embassy. He was charged with spying, keeping confidential documents and "propagating against the ruling system," judiciary spokesman Ali Reza Jamshidi. On Tuesday, he was found not guilty of the first two but guilty of the third charge, Jamshidi said, adding also that the court suspended a sentence against him. A sentence, however, can't be ruled out if the prosecution objects to the court decision, Jamshidi said. Some saw Mousavian's acquittal as a failure by Ahmadinejad to settle accounts with political enemies. "In Iran, hardly anybody will believe that Mousavian was a spy," said political analyst Fayaz Zahed. "The majority of the people agree that the accusations against him were part of a political game by Ahmadinejad's group. Mousavian fell victim to rivalries between Rafsanjani and Ahmadinejad." Still, Zahed predicted Ahmadinejad would continue to raise allegations such as the ones against Mousavian "to lessen pressures on his government because of UN Security Council sanctions against Iran and (his) failing to fix Iran's economy." The United Nations has imposed two rounds of limited sanctions on Iran for its refusal to halt uranium enrichment, a process that can be used to produce either nuclear fuel or a warhead. The United States is pressing for further sanctions. Over the past year, public criticism of Ahmadinejad has increased, with his opponents and many in the public saying his firebrand style has goaded the West against Iran and that he has not fulfilled promises to fix Iran's ailing economy. Rafsanjani - who lost to Ahmadinejad in 2005 elections and now heads the Assembly of Experts, one of the powerful cleric-run bodies that dominates the country's politics - has emerged as a leader of conservatives who grew disillusioned with the president. Significantly, he is also a rival to the president for influence with Iran's supreme leader, Ayatollah Ali Khamenei, who holds final say in all matters and often tries to balance Iran's political factions.