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Looks at the cultural changes taking place in Iran as of July 1998. Election of Mohammed Khatami, a moderate clergyman who studied in the West, as President of Iran; Khatami's campaign for moderation and the rule of law; Opposition to Khatami led by the supreme religious leader Ayatollah Ali Khamanei; Use of the basij, a paramilitary corps of volunteers to fight reforms; Freedom of the press and conciliatory gestures to the United States under Khatami's presidency. INSET: `Khatami is an opportunity,' by Lucian Kim.

The article takes a look at the United States and their anxiety over the Iranian Revolutionary Guard Corps (IRGC), the armed guardians of Iran's theocracy. Officials in the Bush administration are looking to take action against the group, citing that their support for Hezbollah and insurgents in Iraq is dangerous and that they should be shut down. U. S. officials are quiet on how they will proceed, fearing that reaction by foreign allies. INSET: Protecting the Theocracy.

Reports on student militants who occupied the United States Embassy in Tehran, Iran in November 1979. How some of the students are supporting democracy in Iran; Original plan for the student protest; Comment of the ex-militant Abbas Abdi, editor of the reformist newspaper `Salam.'

Reports several political developments in Iran for August 3, 1998. Battle between Islamic mullahs and those favoring reform; Tehran mayor Gholamhossein Karbaschi found guilty of corruption; Newspaper sympathetic to reform ordered shut down by an Iranian court; Test-firing of a missile.