Gambling analogies aside (you have no idea how tempted I was to use a Lady Gaga/Khamenei photo mash-up for this post), it is clear that Khamenei's only hope now is to out-last or out-muscle the protesters and the political elites they represent.
In a characteristically dour speech following Friday prayers, Khamenei said that the election was fair and that the results were not up for debate. He blamed outside influence, specifically British agents, for the recent demonstrations.
It seems to me that Khamenei had two main objectives: first, signal that a crackdown is forthcoming if the protests don't stop and second rally his supporters for what may prove to be a bloody battle, both figuratively and literally.
Strategically, this move makes sense. Khamenei's survival is now invariably linked to Ahmadinejad's presidency and the support of hardliners in the security service, Republican Guard, and militia. Any sign of weakness will in turn weaken his hand with these actors. There is little chance that he will be able to coax the protesters out of the street, so Khamenei must prepare to force them.
Its is going to be an interesting weekend.
Update: Sullivan has the transcript here.
Update 2: Also, just imagine how this speech would have read if Obama had come out in support of Mousavi. Obama did the right thing in not giving Khamenei political material.
-Evan
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