Israel-Iran conflict

If Israel and the US were to attack Iran again, they would ‘face a more decisive response’, Pezeshkian warns.

Iranian President Masoud Pezeshkian says that the United States, Israel and Europe are waging a “full-fledged war” against his country.

“In my opinion, we are in a full-fledged war with America, Israel and Europe. They do not want our country to stand on its feet,” Pezeshkian told the official site of Supreme Leader Ayatollah Ali Khamenei in an interview on Saturday.

The president’s remarks come ahead of Israeli Prime Minister Benjamin Netanyahu’s meeting on Monday with US President Donald Trump. They also come six months after Israel and the US launched strikes on Iran, and after France, Germany and the United Kingdom reimposed United Nations sanctions on Iran in September over its nuclear programme.

“Our dear military forces are doing their jobs with strength, and now, in terms of equipment and manpower, despite all the problems we have, they are stronger than when they [Israel and the US] attacked,” Pezeshkian said.

“So, if they want to attack, they will naturally face a more decisive response.”

The president said that “this war” is unlike past ones.

“This war is worse than Iraq’s war against us. If one understands it well, this war is far more complex and difficult than that war,” Pezeshkian said, referring to the 1980-1988 conflict between the neighbouring countries in which thousands were killed.

The US and its allies accuse Iran of seeking to acquire nuclear weapons, a claim Tehran has repeatedly denied.

Israel and Iran engaged in a 12-day war in June, triggered by an unprecedented Israeli attack on Iranian military and nuclear sites, as well as civilian areas.

The strikes caused more than 1,000 casualties, according to Iranian authorities.

The US later joined the Israeli operation, bombing three Iranian nuclear sites.

Washington’s involvement brought a halt to negotiations with Tehran, which began in April, over its nuclear programme.

Since returning to the White House in January, US President Donald Trump has revived his so-called “maximum pressure” policy against Iran, initiated during his first term.

That has included additional sanctions designed to economically cripple the country and dry up its oil revenues from sales on the global market.

According to recent reports, when Netanyahu visits Trump at his Mar-a-Lago resort in Florida this weekend, he will be pushing for more military actions against Iran, this time focusing on Tehran’s missile programme.

Tehran, Iran – Iran’s currency has been registering new lows amid ongoing economic turmoil that is also reflected in a planned budget for next year that effectively shrinks public spending.

Each United States dollar was priced at about 1.36 million rials in the open market on Wednesday in Tehran, its highest rate ever, before the Iranian currency slightly regained ground on Thursday.

The embattled national currency has been rapidly declining over recent weeks as the US and its Western allies pile on their sanctions and diplomatic pressure, and the threat of another war with Israel lingers.

President Masoud Pezeshkian this week sent his administration’s finalised proposed budget to the hardline-dominated parliament for the upcoming Iranian calendar year, which starts in late March. The budget will then have to be greenlit by the 12-member Guardian Council before being ratified into law in the coming weeks.

The presented budget nominally grew by just over 5 percent compared with last year, but inflation currently stands at about 50 percent – indicating that the government envisions lower spending while managing a so-called “resistance economy” as it faces a massive budget crunch yet again.

But minimum wages are to be raised far below the inflation rate, too, at only 20 percent, meaning that Iranians are once more guaranteed to have far less spending power next year as the embattled national currency sinks.

At the same time, the budget says the government sees taxes rising by a massive 62 percent next year, as authorities try to gradually decrease dependence on oil revenues amid US efforts to drive down Iranian exports, which are carried by a shadow fleet of ships mostly to China.

At the current exchange rate, the whole budget is worth about $106bn, several times lower than the projected 2026 budgets of regional players like Turkiye, Saudi Arabia and Israel.

Iran’s rent-distributing multi-tier exchange rate system is still at play, with the government proposing allocating a rate for customs duties, import valuation and budget accounting tables, and another closer to the open market rate used for oil revenue realisation.

An earlier subsidised exchange rate, which was far lower than the open market rate, has now been abandoned. Any excess cash resulting from this is expected to be doled out to low-income Iranians in the form of electronic coupons that can be used to buy essential items like food.

For the first time, the budget is drafted in new rials as four zeros are expected to be removed from the ailing national currency by the time the budget is operational for next year.

After years of back and forth, the parliament in October approved the government plan to lop off four zeros. The move is only cosmetic and will not help with the runaway inflation, but proponents argued it was necessary after years of currency devaluation.

Budget spells grim outlook

Several major factors have already been raising alarm over how bad the economic situation could become next year.

Iranians online reacted poorly to the fact that the government predicts wages will be far outpaced by inflation and tax collection. Others were concerned that eliminating the subsidised rate for essential goods could cause another price shock in the short term.

Many shared a video of Pezeshkian from last year running for president, when he said during a televised interview that the stark disparity between wage increases and inflation is a “grave injustice” being done to the Iranian people.

“Unfortunately, so long as we do not resolve the structural issues, we are making labourers and government workers poorer by the day while those with money get bigger and bigger,” Pezeshkian said at the time.

“This inflation is an additional tax on the poor and the disenfranchised.”

But successive governments have failed to eliminate budget deficits or rein in banks teetering on the brink of insolvency, therefore relying on the central bank to print more money to run the country and, in turn, exacerbate inflation.

Earlier in December, the government proceeded with increasing the price cap of petroleum despite repeated assurances it had no plans to that effect this year. The move has already led to increased transport costs, which will end up taking inflation higher.

There are now four price tiers for petroleum, with the cheapest and lowest quality that is available to most Iranians costing up to 50,000 rials per litre (about $1.19) and higher quality imported fuel delivered this week at 800,000 rials per litre ($19).

Hamid Pourmohammadi, who heads the Plan and Budget Organization of Iran, insisted that the government has devised a 20-point plan to be unveiled soon that will reduce pressure on the livelihoods of Iran’s 90 million population.

“The government is trying to adopt an active approach to address the economic challenges of the people, businesses and economists, so there is no perception of complacency in these economic conditions,” he said.

Aghil Keshavarz is the tenth person put to death for espionage since June conflict with Israel.

Iran has executed a man convicted of spying for Israel’s Mossad intelligence agency, judicial authorities announced, as Tehran continues a widening crackdown on alleged collaborators following the 12-day Israel-United States-Iran war earlier this year.

Aghil Keshavarz was put to death on Saturday morning after the Supreme Court upheld his conviction on espionage charges, according to Mizan, the judiciary’s official news agency.

The 27-year-old architecture student was arrested earlier this year in the northwestern city of Urmia after military patrols caught him photographing an army headquarters building.

The execution adds to a growing number of people put to death for espionage since the June conflict, with at least 10 executed by September alone.

In September, Iran executed a man it said was “one of the most important spies for Israel in Iran”.

In October, Tehran toughened legislation against alleged spies for Israel and the US, making espionage automatically punishable by death and asset confiscation.

According to the Mizan report, Keshavarz was accused of conducting more than 200 missions for Israeli intelligence services across Tehran, Isfahan, Urmia and Shahroud.

The missions allegedly included photographing target sites, conducting opinion polling, and monitoring traffic patterns at specific locations.

Authorities said he communicated with both Israel’s Mossad and military officials through encrypted messaging platforms, receiving payment in cryptocurrency after completing assignments.

The judiciary said Keshavarz had “knowingly cooperated” with Israeli services with the intention of harming Iran’s Islamic Republic.

The Oslo-based Iran Human Rights group has previously disputed similar espionage convictions, saying suspects are often tortured into false confessions.

Israel’s offensive in June involved 12 days of air attacks, including several against Iran’s top generals and nuclear scientists, as well as civilians in residential areas, for which Iran retaliated with barrages of missiles and drones. The US also carried out extensive strikes, on Israel’s behalf, on Iranian nuclear sites during the conflict. According to Amnesty International, Israeli attacks on Iran killed at least 1,100 people.

In response to the June war and protests in recent years over the state of the economy and women’s rights, as well as calls for regime change, Iran has sentenced more people to death.

In an exclusive, wide-ranging interview recorded in October with Al Jazeera’s Fault Lines documentary programme, Iranian Foreign Minister Abbas Araghchi tells correspondent Hind Hassan that strikes by Israel and the United States in June caused “serious damage” to Iran’s nuclear facilities but insists its nuclear programme will continue.

“Technology cannot be eliminated by bombing,” he says, arguing that Iran’s scientific knowledge remains intact.

As Iran remains locked in a standoff with the US and refuses to renew negotiations while zero uranium enrichment demands remain in place, Araghchi says European snapback sanctions have undermined future cooperation with the United Nations nuclear watchdog, the International Atomic Energy Agency, and Iran would reconsider how it cooperates in the future.

Despite emphasising that “diplomacy is our priority,” the foreign minister insists that Iran is prepared to fight back if it is attacked again. Araghchi maintains that while Tehran has “never trusted the United States as an honest negotiating partner”, Iran remains prepared to engage diplomatically if both sides respect each other’s rights and pursue mutual interests based on equality.