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The Iranian Islamic revolution is a paradox wrapped in an enigma: a combination of pragmatic foreign policy towards its neighbors and ideological radicalism towards Israel and America, a blend of relatively open elections and a power structure in which hard-line clerics control the key institutions. Menashri, Israel's premier Iranian analyst and a Tel Aviv University scholar, is perhaps the most astute observer of the domestic Iranian scene. His study offers a splendid analysis of the 1990s; an epilogue covers 2000, with its hard-line crackdown and reformers' sweep of the Majlis elections. Not only does Menashri have complete command over the source material, but he also presents a well-organized story—and his writing is as interesting as it is clear.

The main focus of Iranian politics, and of Menashri's analysis, is domestic. Notwithstanding a considerable retreat from dogma, the Islamic Republic did not lessen popular discontent. Restrictions on individual liberty, the rampant corruption, and growing unemployment all widened the gap between the clerical ruling elite and the emerging civil society. The revolution may have lost its way but not its muscle and its will to survive. Unfortunately, Menashri offers no prognosis; indeed, his analysis is skimpy on what signs to look for to tell whether the hardliners have crushed the reformists or whether the popular protests are shaking the pillars of revolutionary power.

The second half of Menashri's volume is about foreign affairs, which—in contrast to Iran's domestic scene—is not his strength. Separate chapters analyze Iran's relations with the United States, Israel, and its immediate neighbors. He quotes an Iranian newspaper's observation that Iranian officials speak "sweet words in English to foreigners, but it's strictly Satan-as-usual when they speak Farsi on the home front." Menashri argues that Iran often sets aside ideology in favor of state interest, but that seems little evident in relations with America and Israel. Even regarding its immediate neighbors, Iran has not consistently behaved as pragmatically as Menashri asserts; he skips quickly over the mid-1990's Iranian support for terrorism in Bahrain and Saudi Arabia.