1) The mullahs are truly as crazy and out-of-touch as some portray them. That said, do they now throw the dice one more time and risk rolling snake-eyes. Yes, the odds are heavily in their favor of retaining their control through a massive crack-down on the protestors, but history has a nasty way of repeating itself. They came to power through revolution and could easily lose power by the same means.

2) This whole thing is an elaborate version of Pesian Kabuki theater. I tend to lean a little more this way because it all just feels so completly staged to me. The crazed incumbent steals a fraudulent election with the willing assistance and complicity of the men behind the curtains. The popular underdog opponent rallies the masses forcing a confrontation with the powers that be taking the entire country to the very brink of disaster. Mass destruction is threatened and averted at the last moment as a compromise is reached. End result - the people are placated, life returns to normal (normal being a very relative term in this case), and in all reality nothing has changed because the pretender who has just seized the throne is just another ‘approved’ version of the occupant he replaced.