Ayatollah Khomeini was the ruler of (or at least dominant figure in) Iran for a decade, from the founding of the Islamic Republic in April 1979 until his death in mid-1989. During that time the revolution was being consolidated as a theocratic republic under Khomeini, and Iran was fighting a costly and bloody war with Iraq.
- Main article: Iranian Revolution
Islamic Republic of Iran began with the Iranian Revolution. The first major demonstrations to overthrow Shah Mohammad Reza Pahlavi began in January 1978. The new theocratic Constitution — whereby Khomeini became Supreme Leader of the country — was approved in December 1979. In between, the Shah fled Iran in January 1979 after strikes and demonstrations paralyzed the country, and on February 1, 1979 Ayatollah Khomeini returned to Tehran to a greeting by several million Iranians. The final collapse of the Pahlavi dynasty occurred shortly after on February 11 when Iran's military declared itself "neutral" after guerrillas and rebel troops overwhelmed troops loyal to the Shah in armed street fighting. Iran officially became an Islamic Republic on April 1, 1979 when Iranians overwhelmingly approved a national referendum to make it so.
Initial international impactEdit
The initial impact of the Islamic revolution around the world was tremendous. In the non-Muslim world it has changed the image of Islam, generating much interest in the politics and spirituality of Islam, along with "fear and distrust towards Islam" and particularly the Islamic Republic and its founder. In the Mideast and Muslim world, particularly in its early years, it triggered enormous enthusiasm and redoubled opposition to western intervention and influence. Islamist insurgents rose in Saudi Arabia (the 1979 week-long takeover of the Grand Mosque), Egypt (the 1981 machine-gunning of the Egyptian President Sadat), Syria (the Muslim Brotherhood rebellion in Hama), and Lebanon (the 1983 bombing of the American Embassy and French and American peace-keeping troops).
Consolidation of the RevolutionEdit
- Main article: Consolidation of the Iranian Revolution
Instability in Iran did not end with the creation of the Islamic Republic, and remained high for a few years. The country's economy and apparatus of government had collapsed. Military and security forces were in disarray. But by 1982 (or 1983) Khomeini and his supporters had crushed the rival factions and consolidated power.
The first draft of the constitution for the Islamic Republic contained a conventional president and parliament but its only theocratic element was a Guardian Council to veto unIslamic legislation. However in the summer of 1979 an Assembly of Experts for Constitution, dominated by Khomeini supporters, was elected. Their new draft gave the guardians much more power and added a powerful post of guardian jurist ruler intended for Khomeini. The new constitution was opposed by non-theocratic groups, both secular and Islamic, and set for approval by referendum in December 1979.
- Main article: Iran hostage crisis
An event that helped pass the constitution, radicalize the revolution and strengthen its anti-American stance, was the Iran hostage crisis. On November 4, 1979, Iranian students seized the U.S. embassy in Tehran holding 52 embassy employees hostage for a 444 days. The Carter administration severed diplomatic relations and imposed economic sanctions on April 7, 1980 and later that month unsuccessfully attempted a rescue that further enhanced Khomeini's prestige in Iran. On May 24 the International Court of Justice called for the hostages to be released. Finally the hostages were released 20 January 1981, by agreement of the Carter Administration, see Algiers Accords Jan. 19, 1981. The crisis also marked the beginning of American legal action, or sanctions, that economically separated Iran from America. Sanctions blocked all property within US jurisdiction owned by the Central Bank and Government of Iran.
Suppression of oppositionEdit
Revolutionary factions disagreed on the shape of the new Iran. Those who thought the Shah would be replaced by a democratic government soon found Khomeini disagreed. In early March 1979, he announced, "do not use this term, ‘democratic.’ That is the Western style."
In sucession the National Democratic Front was banned in August 1979, the provisional government was disempowered in November, the Muslim People's Republican Party banned in January 1980, the People's Mujahedin of Iran guerillas came under attack in February 1980, a purge of universities was begun in March 1980, and leftist President Abolhassan Banisadr was impeached in June 1981.
Explanations for why Khomeini supporters were successful in crushing the opposition include lack of unity in the opposition. According to Asghar Schirazi, the moderates lacked ambition and were not well organised, while the radicals (such People's Mujahedin of Iran or PMOI) were "unrealistic" about the conservatism of the Iranian masses and unprepared to work with moderates to fight against theocracy. Moderate Islamists, such as Banisadr, were "credulous and submissive" towards Khomeini. 
The ouster of President Banisadr did not put an immediate end to opposition, but moved it to terror. Hundreds of PMOI supporters and members were killed from 1979 to 1981, and some 3,000 were arrested, but unlike other opposition driven underground by the regime, the PMOI was able to retaliate.
On 28 June 1981, bombs were detonated at the headquarters of the since-dissolved Islamic Republic Party. Around 70 high-ranking officials, including Chief Justice Mohammad Beheshti (who was the second most powerful figure in the revolution after Ayatollah Khomeini at the time), cabinet members, and members of parliament, were killed. The PMOI never publicly confirmed or denied any responsibility for the deed, but only stated the attack was `a natural and necessary reaction to the regime's atrocities.` Khomeini did accuse them of responsibility and, according to BBC journalist Baqer Moin, the PMOI were "generally perceived as the culprits" for it in Iran. Two months later on August 30, another bomb was detonated killing President Rajai and Premier Mohammad Javad Bahonar. A member of the PMOI, Mas'ud Kashmiri, was announced as the perpetrator, and according to regime reports came close to killing the entire government including Khomeini. The reaction following both bombings was intense with thousands of arrests and hundreds of executions of PMOI and other leftist groups, but "assassinations of leading officials and active supporters of the regime by the PMOI were to continue for the next year or two."
- Main article: Iran–Iraq War
The eight year long Iran–Iraq War (September 1980 - August 1988) was the most important international event for the first decade of the Islamic Republic and possibly for its history so far. It helped to strengthen the revolution although it cost Iran much in lives and treasure.
Shortly after the success of the revolution, revolutionary leader Ruhollah Khomeini began calling for Islamic revolutions across the Muslim world, including Iran's Arab neighbor Iraq,  the one large state besides Iran in the Gulf with a Shia Muslim majority population.
The war began with Iraq's invasion of Iran, in an attempt by Iraq's dictator Saddam Hussein to take advantage of the perceived post-revolutionary military weakness in Iran and the Revolution's unpopularity with Western governments. Much of the top leadership of Iran's once-strong Iranian military had been executed. Saddam sought to expand Iraq's access to the Persian Gulf and the oil reserves in Khuzestan (which also only has a substantial Arab population), and to undermine Iranian Islamic revolutionary attempts to incite the Shi'a majority of his country. Many Iranians believe Saddam invaded with the encouragement of the United States, Saudi Arabia and other countries.
A combination of fierce resistance by Iranians and military incompetence by Iraqi forces soon stalled the Iraqi advance and by early 1982 Iran regained almost all the territory lost to the invasion. The invasion rallied Iranians behind the new regime, enhancing Khomeini's stature and allowed him to consolidate and stabilize his leadership. After this reversal, Khomeini refused an Iraqi offer of a truce, declaring "the regime in Baghdad must fall and must be replaced by an Islamic Republic."
The war continued for another six years under the slogans `War, War until Victory,` and `The Road to Jerusalem Goes through Baghdad,` but other countries, particularly the United States, gave crucial aid to Iraq. As the costs mounted and Iranian morale waned, Khomeini finally accepted a truce called for by UN Security Council Resolution 598.  Although neither borders nor regimes were changed  the war helped to `awaken the people and to fight the problems that threaten the revolution,` according to future president Akbar Hashemi Rafsanjani.  An estimated 200,000 Iranian were killed  and the war is estimated to have cost Iran $627 billion in total direct and indirect charges (in 1990 dollars). 
Early laws of the Islamic RepublicEdit
The new regime undid the Shah's old Family Protection Law, lowering the marriage age for girls back to nine and allowed husbands to divorce wives with the Triple talaq, without court permission. It purged women from the judiciary and secular teachers from the educational system. It removed Baha'is from government positions, closed down Baha'i Centers, and arrested and even executed their leaders. A strict `Islamic code of public appearance` was enforced - men were discouraged from wearing ties, women were obliged to wear either scarves and long coats or preferably the full chadour. 
Iran economy suffered during the first decade following the revolution. Its currency, the rial, fell from 7 to the dollar before the revolution, to 1749 to the dollar in 1989. The revolution also is said have put an end to the influence of "the notables", and created a very large public sector of the economy, when the government "nationalizing their enterprises in order to keep their employees working... the state ended up with more than 2000 factories many of them operating in the red." 
In its early years the revolutionary regime was especially criticized for its human rights record. In the first 28 months of the Islamic Republic, between February 1979 and June 1981, revolutionary courts executed 497 political opponents as `counterrevolutionaries`, and `sowers of corruption on earth.` In the next four years from June 1981 until June 1985, the courts sentenced more than 8000 opponents to death. After a relative lull, thousands of political prisoners were executed in 1988. Like other revolutions before it, the Iranian Revolution took a higher toll on those who had participated in the revolution than those in the regime it over threw.
President Rafsanjani's administrationEdit
Ideological changes by fatwa and constitutionEdit
Two major changes in the ideological underpinnings of the Islamic Republic occurred toward the end of Khomeini's reign. In January 1988, he issued an edict declaring that the Islamic "Government is among the most important divine injunctions and has priority over all peripheral divine orders ... even prayers, fasting and the hajj."  In April of the next year he decreed a task force to revise the country's constitution to separate the post of Supreme Leader of Iran from that of Shia marja, (the `highest source of religious emulation`), since he found none of marja to be suitable successors as none had given strong support for his policies. The amendments were drafted and approved by the public about one month after Khomeini's death (1989 July 9). They paved the way for Ali Khamenei - a long time lieutenant of Khomeini, but a relatively low ranking cleric - to be Khomeini's successor as Supreme Leader, but to critics they undermined the "intellectual foundations" of the Islamic Republic theocracy, braking "the charismatic bond between leader and followers."
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