A visitor to the Islamic Republic of Iran is constantly reminded that this Middle Eastern country is unique in the region, part-Persian, part-Islamic and part-Western - and not Arab. In 1935 the Persian ambassador to Berlin wrote to Hitler, "We are Aryans," and the country's name was changed from Persia to Iran, "land of the Aryans" in Farsi. The illustrious history of ancient Persia still resonates strongly. If anything, there has been a revival of interest in its scope and grandeur, and the Islamic Revolution of 1979 with its oppressive, Arabizing policies is sometimes referred to scornfully as "the second Arab invasion." Modern Iranians are proud that it took the seventh-century Arab invaders 200 years to subdue Persia and Zoroastrianism; that Persians later asserted their individuality by adopting Shi'ite rather than Sunni Islam; and that the Farsi language stubbornly survived even though Arabic script was imposed upon it. Many cultural norms remain distinctly Persian. "Do Iranians have four wives?" "No, that's the Arab mentality!" The rich tradition of Persian poetry, full of love and wine, roses and nightingales, permeates language and culture. Iranians like to stroll in the elegant, traditional gardens of the mausoleums of their famous poets - Hafez, Sa'di, Rumi and others - whose works are a part of the school curriculum that the Islamist regime was unable to stamp out. Concepts of freedom, truth and human rights have deep roots here. The world heritage, but pre-Islamic, ruins of Persepolis were barely saved from bulldozing ordered by zealous clerics. "But now," writes one blogger, "even religious conservatives are reconciling themselves with the past, with who we are." The tomb of Cyrus, a lone ziggurat amid the windswept ruins of his capital city, Pasargadae, is being carefully restored. One of the most powerful drivers of the nuclear program is this resurgent nationalism, fueled not only by the confidence of oil bounty, but by long-standing resentment of foreign intervention in Iran's internal affairs, and by a sense that Iran is at last taking its proper place in the region and the world. Support for a nuclear Iran is fervent. Why India, Pakistan and Israel, and not us? Since its uranium enrichment was revealed, the Natanz nuclear facility has been ringed by electronic surveillance and anti-aircraft guns. From the road, the above-ground buildings look like any other industrial plant dotted across the flat Isfahan hinterland - petrochemicals, steel, concrete, oil refining. Photos are strictly forbidden. We stare hard as we pass by, stopping only at one of the shabby wayside gas stations and snack bars. The pace is steady. Intercity buses have their speed controlled by GPS checked against a digital tachygraph that the driver has to produce at police checkpoints, with his ID. While the average Iranian undoubtedly opposes Israel as an oppressive occupier of Palestinian land, anti-Israelism is not a defining element of Iranian-Persian identity. There are no specific quarrels, no disputed borders. Educated Iranians cite historical associations with Jews, and are aware that Teheranis such as Moshe Katsav and Shaul Mofaz became prominent Israelis. They laugh at the thought of Iran attacking Israel - unless Israel attacks first. The ruling regime, of course, remains implacably hostile. President Mahmoud Ahmadinejad's "annihilate Israel" comments were not original, but repeated Ayatollah Khomeini's mantras of some years before. Former president Muhammad Khatami spoke of Israel as "a plague," a "terrorist racist Zionist regime." The newest twist, in Iranian TV's documentary The Secrets of Armageddon, is that international Zionism aims not only to take over the world, but to turn Iran into a location for Armageddon. Iranians readily admit that they help to train and supply Hizbullah and Hamas. "There is a balance," said one. "We support these two groups against a strong Israel. That's fine so long as the balance doesn't change." What Teheran thinks about the balance in view of Israel's attack on Gaza remains to be seen. Yet the preoccupations of most Iranians are not about conquest, destroying Israel, raising the flag of jihad or retrieving Muslim land for Allah. The parlous state of the economy - 25 percent to 30% inflation and 20% unemployment - dominates conversations and already overshadows the May 2009 elections. Iranians are daily reminded of their devalued currency: Thick green wads of 20,000-rial notes, each worth about $1, are needed for every transaction. The labor force is swollen by two million illegal foreign workers, mostly from Afghanistan, and thousands of Iraqi refugees. Some Iranians find work in the black market that flourishes across porous borders for all kinds of goods, including large quantities of drugs and alcohol - liquor is readily available from car trunks if you know a clandestine dealer's cellphone number. But many unemployed graduates emigrate, voting with their feet in a large and damaging brain drain. Everywhere, one hears complaints about Ahmadinejad. A former mayor of Teheran, he had no national standing before becoming president. Elected by only 10 million of the 17 million who bothered to vote, he is derided for his economically unsound policies, financial mismanagement and embarrassing behavior on the international stage. "He has attracted enemies unnecessarily," said one Iranian. By some estimates, only 15% of the population supports Ahmadinejad's rigid fundamentalism. A devout believer in the reappearance of Shi'ite Islam's 12th imam, who will restore justice to the world (and hopefully to Iran), the president keeps an empty chair beside him at cabinet meetings, which many regard as extreme. There are new claims of cronyism. The interior minister being impeached for his fake Oxford PhD certificate is a friend of Ahmadinejad, who, it is said, must have known. Although the regime's grip has diminished since the 1980s - partly to avoid antagonizing the country's huge youth population, partly because of more pressing concerns - criticism is quickly stifled. Newspapers critical of the government are closed down, most recently the popular weekly Shahravande Emrouz, for "publishing baseless news about President Ahmadinejad's administration..." Activists in the 1-million-signature campaign to change discriminatory laws against women are being harassed, arrested and even imprisoned. Under Iranian law no woman can retain custody of children older than seven, and a woman's testimony is worth half that of a man's. The overriding political problem is that there is no organized or national opposition, and the numerous individuals and groups who privately oppose the regime have no shared forum. Dissident students are not allowed a voice. This is no 1979, when a broad-based anti-shah opposition including communists, republicans, intellectuals and Islamists delivered a revolution. Yet there is considerable restiveness. Seventy percent of the population is younger than 30, beneficiaries of the government's pro-baby policy after the massive death toll of the Iran-Iraq War. Many are avid Internet users and bloggers, and plugged into illegal satellite TV. They are internationally aware, curious, lively, unfailingly courteous, more secular, but very nationalistic. "We lead a double life," several explained. "What was public before the revolution [alcohol consumption, freedom of dress] is now private, and what was private [religious observance] is now public. When we close the doors of our homes, we are in a different world." Here and there, hijabs are brighter colored and pushed back to reveal hair, and women's garments more figure-hugging, often worn over jeans. The vigilantes who once barged unannounced into private homes to check on religious observance are now rarely seen except at public events. In the republic's early years, the ruling clerics tried to run the economy along strict Islamic lines, with disastrous results. Attempts to diversify under the moderately reformist Khatami (1997-2005) were sabotaged by powerful clerical cadres. Thirty years after the revolution the economy remains heavily oil-dependent, incompetently managed and now stricken by a plunging oil price that also puts at risk Ahmadinejad's expensive populist commitments. The International Monetary Fund has calculated that Iran needs an oil price of $95 a barrel just to balance its budget. The economic malaise has reached crisis point. In November a conference on international investment in tourism was held in Teheran with the express aims of job creation and diversifying the economy away from oil. A 20-year plan is targeting 20 million tourists. Tax and land use incentives were offered, along with an extensive list of historic sites requiring development from cultural heritage to accommodation, eco-tourism and handicraft villages. The main participants were Turks - scoffed at as minor players by one Teherani businessman who has felt the bite of US-led financial sanctions as he failed to secure overseas contracts. Government interference in Iran's private sector has long made it a high-risk investment. But the recently stepped-up sanctions on banks that do business with Iran have cut far deeper than the UN measures. Many foreign banks are refusing loans to Iranians, creating difficulties for trade financing and payments - and for major sectoral development such as tourism. Those calling for Khatami to stand again in May do so knowing that the regime's control of the Majlis, and the powers of the shadowy Guardian Council, are unlikely to change. The council's strict vetting of all parliamentary candidates disqualified hundreds from the 2005 election. "It doesn't matter who is elected president next year," said one Iranian grimly, "the system remains the same." In the background, however, is the relentless demographic surge, a groundswell for change. Yet the change wanted by many Iranians is not more Westernization or imposed solutions. Some say that what may emerge is a religious democracy with its own norms and values, but it will be novel, and quintessentially Iranian. The US presidential election aroused some excitement. "Forty years is a special number," exclaimed one young Teherani. "[Barack] Obama has become president 40 years after Bobby Kennedy said that a black man would do this. It will soon be 40 years since our revolution, and we have a new young generation that does not share the values of the present regime. I can feel the winds of change coming."