Iran, the largest Shiite country, has been a theocracy since the ouster of Shah Mohammed Reza Pahlavi in the Islamic Revolution of 1979. It has been at odds with the United States and the West for much of that time. Over the last few years, the United States has criticized Iran for its suppression of the pro-democracy Green movement in 2009 when a disputed presidential vote set off a bloody crackdown against street protesters; its support for militant groups like Hamas and Hezbollah; and, most significantly, for its nuclear program, which the West believes is meant to develop weapons. Over the past year, there have been many rounds of nuclear talks with Iran — most recently in Moscow in June 2012 — but they have stalled, though it is unclear whether this was a tactical move by Iran or a collapse of the latest diplomatic effort. Halting Iran’s nuclear progress has been an urgent issue for Israel, prompting worry that it might mount a military strike against Iran — adding to the enmity between the two countries. In July 2012, tensions escalated further, when a suicide bomber attacked a tour bus carrying Israeli vacationers outside an airport in the Bulgarian city of Burgas. Five Israelis and the Bulgarian driver of the bus were killed along with the bomber, and dozens more were injured. Israel quickly blamed Hezbollah, the Iran-backed militia in Lebanon, and promised a firm response. Since 2005, Iran’s president, Mahmoud Ahmadinejad, has been a divisive figure in world affairs, cheering on the development of the country’s nuclear program despite orders from the United Nations to halt it. But his power has been in decline since he ran afoul of the country’s supreme leader, Ayatollah Ali Khamenei, by challenging the authority of the clergy. In March 2012, Iran’s first parliamentary elections since the government crackdown in 2009 gave Mr. Khameini the ironclad majority he needed to cut Mr. Ahmadinejad down to size — a process helped by Iran’s economic troubles, which have increased the president’s unpopularity. Nuclear Program: Sanctions Take a Toll

Iran and the West have been at odds for years over its nuclear program, which the West suspects is a cover for developing weapons. But the dispute has picked up steam since November 2011, with new findings by international inspectors, tougher sanctions by the United States and Europe against Iran’s oil exports, threats by Iran to shut the Strait of Hormuz to oil shipments and Israel signaling increasing readiness to attack Iran’s nuclear facilities. In the summer of 2012, after years of attempting to halt Iran’s nuclear program with diplomacy, sanctions and sabotage, the Obama administration and its allies imposed sweeping new sanctions meant to cut Iran off from the global oil market. By early October, Iran was plunged into an economic crisis as its fragile currency, the rial, showed new signs of stress, falling 40 percent in a week as it was battered by a combination of potent Western sanctions over the disputed Iranian nuclear program and new anxieties among Iranians about their government’s economic stewardship. On Oct. 2, President Ahmadinejad said that Iran was facing a “psychological war” waged by the United States and aided by what he described as internal enemies. He pleaded with Iranians not to exchange their money for dollars and other foreign currencies. The next day, clashes erupted in the center of Tehran between money changers and security forces after riot police on motorcycles used batons and tear gas to shut down a long-tolerated black-market for foreign currency. On Oct. 15, the European Union toughened its sanctions on Iran, banning trade in sectors like finance, metals and natural gas, and making business transactions in many other areas far more cumbersome. The fall in the currency’s value, which has driven up the price of many staples, has presented Iran with enormous economic risks, including the possibility of