It was a nerve-wracking 2003 for Iran's leaders: the Saddam Hussein regime collapsed in just three weeks under overwhelming US firepower, leaving many here to fear Iran -- now effectively surroounded by American forces -- could be the next "axis of evil" member to come under attack.

In addition, the Islamic republic, founded in February 1979, found itself accused of the same offences used to justify the US invasion of Iraq; developing weapons of mass destruction, sponsoring terrorists undermining the Middle East peace process, and harbouring Al-Qaeda.

And on the home front, the regime did battle with more student pro-democracy protests -- with which the United States expressed its solidarity -- although any internal threat to its grip on power was stemmed by some 3,000 arrests and a tough judicial crackdown of dissidents and radical reformers.

Iran could not escape the spotlight on its human rights record given its heavy-handed quelling of the protests, the killing in custody of Canadian-Iranian photographer Zahra Kazemi and with human rights activist Shirin Ebadi taking the Nobel Peace Prize.

Ebadi, aged 56 and the first Muslim woman and first Iranian to win the prize, is a lawyer whose campaigning for the rights of women, children and dissidents has enraged hardliners here.

Even embattled President Mohammad Khatami was obliged to distance himself from her when he dismissed her achievement as "not important".

Conservative/reformist tensions also continued to boil, with the position of pro-reform Khatami and his pledge to overhaul the way Iran is run appearing weaker than ever in the face of opposition from powerful but unelected hardliners controlling the judiciary and legislative oversight bodies.

Frustrations with the political in-fighting and stagnant economy were visible in February when during municipal elections, voter turnout was at an all-time low and conservatives triumphed in major cities.

Analysts say reformers risk the same treatment during parliamentary elections in early 2004, with another no-show by voters presenting the regime with a crisis of legitimacy.

All the pressure added up to give the impression that it was a regime under siege -- at home and overseas.

As the United States prepared to invade Iraq, the government allocated a special budget to the fight against US "plots". Supreme leader Ayatollah Ali Khamenei eventually classed the attack on Iraq as a "war against Islam".

But given Iran's long hatred of Saddam -- whose "imposed war" in the 1980s cost the lives of hundreds of thousands of Iranians -- diplomats reported some top secret cooperation between Iran and the United States.

But those behind-the-scenes contacts in Geneva failed to make any headway.

And they soon broke down amid US allegations that Iran was meddling in post-war Iraq and -- more seriously -- harbouring al-Qaeda fugitives linked to the May suicide bombings in Riyadh.

Iran eventually said it was holding some top al-Qaeda members, but refused to hand them over to Washington. Diplomats said they include bin Laden's son, Saad, Al-Qaeda's spokesman, Sulaiman Abu Gaith, and its number three, Saif al-Adel.

The heaviest pressure was over Iran's bid to generate nuclear energy, described by Iran as crucial for meeting future energy needs but seen by many as a convenient cover for nuclear weapons development.

Israel was also alarmed, especially given that Iran had completed and deployed its Shahab-3 missile capable of hitting the Jewish state and paraded here with the banner "Israel should be wiped off the map".

After US lobbying, the UN's International Atomic Energy Agency (IAEA) in September gave Iran a deadline to comply with nuclear inspections, cease uranium enrichment and come clean on its activities -- or else be referred to the UN Security Council.

It was a time of tough decision-making here.

Pragmatists in the regime urged compliance, with hardliners calling for the country to take the path of North Korea and pull out of the Non-Proliferation Treaty altogether.

Eventually in October, with Britain, France and Germany sending their foreign ministers here to secure a deal, Iran agreed to take the path of diplomacy and head off the threat of possible UN sanctions, or even US or Israeli strikes.

The IAEA then condemned Iran for 18 years of covert nuclear activities, although a report said there was no clear evidence the country has been developing nuclear arms.

With Washington dismissing that conclusion as "simply too impossible to believe" and Israel warning the point of no return in the alleged Iran nuclear programme may be reached within a year, Iran's woes appear to be far from over.

But Iranian diplomacy did kick into action to bolster its position following the US invasions of Iraq and Afghanistan, another of Iran's neighbours.

It courted and officially recognised the US-appointed Iraqi Governing Council, hosted European ministers, UN rights envoys and sought to repair and boost ties with Saudi Arabia, Kuwait, Algeria and Egypt.

And with the US facing daily attacks in Iraq, analysts say that Iran may -- for the time being at least -- have some breathing space.

All rights reserved. Copyright 2003 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

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