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Mahmoud Ahmadinejad’s victory in Iran's presidential elections is in itself no surprise. The surprise lies both in the huge margin by which he defeated his main opponent, Mir-Hossein Mousavi, and in that he earned his victory in the first round of voting, although the impression in the final pre-election days was that Mousavi was garnering growing support in the cities. Nonetheless, Ahmadinejad had important political assets, and these netted him the victory. He is especially popular among the middle and lower classes in rural areas, due to his own simple way of life and his call to return to the values of the Islamic Revolution. He enjoys the support of religious organizations and apparently also that of the Revolutionary Guards from whose ranks he emerged. Above all, Supreme Leader Ali Khamenei, the most important individual in Iran’s top leadership, supported him. These edges were enough for Ahmadinejad to parry successfully the harsh criticism leveled against him, particularly in light of Iran’s difficult economic situation. While it is likely there was widespread fraud in the election process that colored the actual voter results, it is uncertain whether this determined the final outcome. In any case, it is clear that Ahmadinejad took advantage of being the incumbent president to secure funds and media time to help his campaign.

Mir-Hossein Mousavi was the great hope of the reformists, especially with regard to promoting change in the Iranian establishment. He appealed primarily to the urban middle class, intellectuals, women, and the younger population – the major segments of the population seeking to change the character of the regime. He enjoyed the public support of the reformist leader, former president Mohammad Khatami. And he boasted an additional drawing card: as a veteran of the revolution, he was close to revolution leader Khomeini and served as Iran’s prime minister during the difficult period of the Iraq-Iran War. Yet this was not enough to offset Ahmadinejad’s advantages, especially because Mousavi was not sufficiently well known, having been absent from the political stage in the last two decades, and because within the reformist camp there were those who, on the basis of his past conduct, suspected him of not being a true reformist.

In any case, it seems that the election results would not bring about an immediate overthrow of the Iranian regime. The real decision maker in Iran is Supreme Leader Khamenei, and his office is not up for election. The elections concerned only the senior echelon underneath him. In this sense, the main significance of the elections is that Ahmadinejad received a mandate to continue his radical internal and external policy with Khamenei’s blessing. While at the start of his first term in office Ahmadinejad was a virtually unknown politician, today he has a strengthened power base and enjoys the support of the real power brokers in the regime.

Yet the situation has changed damatically by the mass demonstrations against Ahmadinejad's reelection. The protest against the results of the elections is the outcome of deep unrest and frustration among some of the Iranian people. Many, perhaps even the majority of the Iranian public, want a change in the nature of the regime. They want a more open political system, more personal freedom, and less interference by the regime in their personal lives – interference that increased during Ahmadinejad’s presidency – a more prosperous economy, a higher standard of living, and less corruption. The large reformist camp has not succeeded in bringing about change, not even  in 1997-2005, the years when its leader, Khatami, was president, mostly because it lacked organization, determination, and strong leadership. This time the reformist camp had high expectations, because the impression was that the sector interested in change was better organized than before and had succeeded in establishing a popular protest movement highlighting Ahmadinejad’s failures. However, this was apparently insufficient to secure victory for its leader.

The ongoing riots pose a serious challenge to the regime and Khamenei, since they can spiral out of control and threaten the stability of the regime. So far, the situation is still under  control and there is a good chance that the regime will be able to contain the protest by a combination of force and political compromise. The reformists’ expressions of protest and frustration may continue in the immediate future, but a more likely scenario is that the regime will ultimately succeed in suppressing it. The regime has many years of experience in dealing with upheaval and protests, especially those involving young people and students demanding change. According to media reports, the regime has suggested two concessions: to recount the ballots that are suspected of fraud, and to include reormist ministers in the government. Invalidating the elections and scheduling new ones will be a very difficult concession for the regime and it will try to reject it. Yet even if the unrest declines within the coming days or weeks, it should serve as a warning sign for the regime, since it might outbreak again in the future. It is possible therefore that the regime will change some components of its domestic policy, in order to reduce the potential unrest.

Ahmadinejad’s reelection implies the continuation of the main lines of his security and foreign policies. It is clear that he will continue to strive for nuclear weapons. Indeed, the nuclear issue was not a focus of controversy during the presidential election campaign. All four candidates explicitly supported the continuation of Iran’s nuclear program – officially, of course, for peaceful purposes, because Irandoes not even hint at wanting nuclear weapons. Ahmadinejad’s reelection also probably means that the tactic regarding this issue will not change and that Iran will maintain a hard posture, with only narrow margins for concessions and compromises and certainly no room for conceding the strategic goal of attaining nuclear weapons.

Ahmadinejad’s reelection bodes poorly for President Obama’sMiddle East policy. The American administration had hoped that a change of Iran's president would help establish the dialogue that Obama wants to develop with the Iranian regime. The question of dialogue with the United States was not a central issue during the campaign. All four candidates expressed support for dialogue, each citing different conditions. But it is clear that Mousavi, with his restrained manner, cultured demeanor, and message of change, was the most suitable partner for dialogue. Ahmadinejad’s reelection means a rigid, nationalistic, and blunt line regarding a dialogue with the Obama administration, should it even develop. It is possible that Ahmadinejad’s second term in office also has implications for the timetable of the dialogue. The administration was prepared to acceptIran’s position that any dialogue had to be postponed until after the elections, and it is possible that had Mousavi been elected the administration would have had to wait an additional period until he settled into office. Since Ahmadinejad is continuing in a second term, it is possible that the American administration will seek to shorten the timetable and create conditions that can start the dialogue sooner.

From Israel’s perspective, the picture is simpler. It is true that internal change in Iran and a moderation of the regime are in Israel’s interest. However, it is clear that no significant change in the Iranian system is on the horizon, and even had Mousavi been elected he would have continued to lead Iran’s nuclear program and the hostile policy towards Israel. Therefore, Israel has a certain advantage in Ahmadinejad's reelection. With Ahmadinejad as president, it is easier for Israel to explain the significance of the Iranian threat, and there is less chance that the American administration or the European governments will be tempted to believe that it is possible to achieve a comprehensive deal on the Iranian nuclear issue.