Today is Ashura, the day of mourning for the martyrdom of the Imam al-Hossein at Kerbala in 680. Even in my sheeshy uptown neighbourhood, the drums and amplified laments have added a doleful soundtrack to the past few days. But this time it seems strangely subdued. Perhaps it is the relative absence of posters depicting the Imam as a handsome young knight, which have been criticised by Qom theologians. The only ones I saw at Tajrish were on a wall of the bazaar alongside images of pop stars (below). Last year a huge one hung next to the mosque.



Last Moharram also coincided with the Danish cartoons row. Protesters attacked Scandinavian embassies with cries of "Ya Hossein!" and "Kerbala!". Given that most of them seemed to know little about the cartoons themselves (or to care, much), they used Ashura as a sort of rallying cry before launching themselves at the indifferent ranks of riot police with stones and molotov cocktails. As a protest, it seemed as heartfelt as the tazziyeh plays that act out the last days of the Imam: a good way to let off some emotional steam, but fundamentally unreal and performed within strict boundaries.



Some of my more secular Iranian friends dislike Moharram, with its dour public face of grief. But I enjoy the processions of flagellants, the evocative drumming, the pageantry of tazzieh and customs like distributing food. The other night a friend remarked that if you transported officials from Washington to see a procession, they might want to bomb on the spot. There is, it is true, something a little sinister about the first view of a procession of men, all in black, green bands round their heads, extolling martyrdom as they thrash themselves with chain whips to the beat of a slow drum (above).



But take a closer look and you'll notice how many of these young men are the same ones who cruise the streets swapping phone numbers with girls. They wear their hair fashionably gelled, listen to Western music and wear the latest trendy clothes. It is a mistake to assume that cool kids can't be religious, but it's equally silly to interpret traditional rites as marks of fanaticism. For some of these young men (particularly the strong ones), Ashura processions seem to be expressions of machismo. Flagellants carry themselves with panache and the men chosen to bear the heavy ornate standards (above) do so with swagger. After all, everybody looks good in black.

Whenever you quit Tehran for a day or weekend trip, you wonder why you don't do it more often. Southwestern Iran - the cradle of ancient civilisation - was the venue for last week's jaunt, taking in Shushtar (very underrated as a tourist destination), Shush (overrated) and Choqa Zanbil (another extraordinary and unique Iranian building). An afternoon mountain drive through Luristan provided the scenic splendour; Kate brought the picnic.



Even if you've travelled a fair bit in Iran, it has great capacity to surprise. Shushtar has a bizarre network of ancient hydrolics, where a Sassanian canal of the Karun river cuts through the sandstone and once powered 30 flour mills. A charming mosque with a leaning minaret, a distinctly Khouzestani imamzadeh (above) and a couple of ancient bridges add to Shushtar's sense of a busy history. Arabs in dishdashas and Bakhtiari nomads in their stylish woollen coats and black bellbottom trousers lend it a colourful local identity sometimes missing in small Iranian towns.



Choqa Zanbil (above) is another of those one-off structures - like the palace at Firouzabad, Oljeitsu's dome at Soltaniyeh, the imamzadeh at Mahan, and, so I'm told, the tower at Gonbad-e Kavuus - that give Iran so much potential depth as a tourist destination. The 3,000-year-old ziggurat has a peculiarly modern feel. The brickwork is in excellent condition and could have been put up yesterday, with its stylish insets and elegant narrow stairways. My only problem was a complete inability to relate to the people who built it. What did Elamites look like? What did they do? It may as well have been plonked there by aliens.



Shush is pleasant but dull. The ancient palace of Apadana, once the seat of a great empire, is now a series of small walls overlooked by a tall castle, built out of ancient debris by French archaeologists to ward off rampaging bandits (such Gallic style!). A quick look (nobody could accuse us of being thorough) and we were off for the hills, and a picnic on the serrated edges of a tight gorge in what was once prime bandit country (above). It's smash-and-grab tourism - the southwest in a day.

I just tried to buy something with PayPal and got the following message:

Error 3028. You have accessed your account from a sanctioned country. In accordance with international sanctions regulations, you are not authorised to access the PayPal system. For more information about your PayPal account status, contact complianceverifications@paypal.com.

Friends say American credit cards have had this problem for some time. Are British ones following suit? I'm not sure how any country was brought to its knees by preventing people shopping at Amazon, but the ways of international finance are apparently mysterious.

An excellent new book of photographs from Iran is just coming out. The pictures give an unusual, often personal view of the country that will tell you far more than the classic shots of chadors, ancient ruins and turbans so beloved of the visitor.

Buy a copy at: http://ashtarydesign.com/

The BBC revelation of an Iranian offer to the US in 2003 shows how far the balance of regional power has changed. Back in early 2003, Iran was seriously worried about the threat posed by the US as its arrival in Afghanistan and Iraq threatened to surround the Islamic republic with "a ring of steel". It is not clear where the deal - involving compromise on Iran's support for Hezbollah and its nuclear transparency in return for promises to end aggression towards Iran and disband the MKO - came from. But it seems very unlikely such an offer could have been made without the approval of the Supreme Leader. That it was dismissed so summarily by Dick Cheney says a lot about the overconfidence of American leaders four years ago.

More recently the shoe has been on the other foot. American problems in Iraq, the high oil price and dissatisfaction at home with military adventures weakened its position. Iranian strategists played down the need to make concessions while President Mahmoud Ahmadinejad kicked up a storm.

But now there is a growing sense of concern in Tehran that Iran has overplayed its hand and missed a good time to negotiate from a position of strength. The Holocaust conference made it very difficult for Western politicians to sit down with Iran without being lambasted at home. The US is talking tough, sending more armour to the Persian Gulf, arresting Iranians in Iraq and generally rattling its sabre once more. Another opportunity to talk has slipped away and each side may come to regret the rejection of overtures made by the other in times past.

A clear month of big Iran news... these were the important bits (sorry for the length):

International policy institutes disowned Tehran's Institute for Political & International Studies for its Holocaust conference in a mid-December letter. Signatories included the International Institute for Strategic Studies in London, the Aspen Institute of Berlin, the German Marshall Fund in Washington, the Geneva Centre for Security Policy, the Centre for International Studies & Research in Paris and the Centre for International Relations in Warsaw. They said they would no longer work with the IPIS.

Results from the 15 December elections came through over the following week. They were seen as a very poor result for Ahmadinejad, who had personally endorsed candidates for both the municipal and Assembly of Experts elections. For Tehran council, current mayor Mohammed Baqer Qalibaf's conservative camp took eight seats, the reformists took four and the president's supporters three. In the assembly elections, Rafsanjani romped to first place with more than a million votes in the Tehran constituency, while Ayatollah Mohammed Taqi Mesbah-Yazdi came in eighth, dashing hardliner hopes of winning control of the body.

Central Bank of Iran said on 18 December it would move its foreign currency reserves from US dollars to Euros and other currencies. It would use the Euro for most oil deals but would still accept dollars for some oil sales, it said. It is widely believed to have been moving its reserves from dollars for months or even years. Future budgets might be calculated in Euros.

US forces on 21 December seized five Iranians, including three diplomats, in Iraq on suspicion of smuggling weapons to militants. A BBC report on 4 January quoted an unnamed British official saying the men were "senior officers in various intelligence organisations." The diplomats were released the same day. The other two were taken with eight other men, not Iranian, after a raid on the compound of Abdul Aziz al-Hakim. Iraq protested their arrest.

The UN Security Council passed a weak sanctions resolution against Iran on 23 December after months of disagreement. The resolution is under chapter 7 of UN charter article 41, making enforcement obligatory but limiting action to non-military measures. The sanctions prevent the import or export of nuclear material and a freeze on the assets of 10 companies and 12 people. "They seek to mobilise a group of their agents on the pretext of this piece of paper in order to sow seeds of discord among the Iranian nation," said Ahamdinejad in response."No matter [whether] they accept it or not, Iran is now an established nuclear state and it is in their interest to live alongside the Iranian nation."

Justice Minister Jamal Karimirad was killed with two members of his family in a car crash on 29 December. State TV said the accident happened in central Iran, near Salafjegan, and that Karimirad's son was driving.

The Majlis on 2 January passed a bill raising the minimum voting age in parliamentary and presidential elections to 18 from 15. Ahmadinejad's government opposed the bill, which now goes to the Guardian Council for ratification. Supporters said it brought the voting age into line with the age for military service and driving.

Cultural Heritage & Tourism Organisation boss and vice-president Esfandyar Rahim Mashaie on 3 January said he would sue two MPs for distributing a CD apparently showing him at a dance in Turkey. He says the film was doctored to show him applauding women dancing during an official ceremony. He says he left the ceremony before the dance began. The two MPs are long-time Ahmadinejad critic Emad Afrough and Saeed Abotaleb. "They lied since they edited a portion of the opening session when there was dancing, trying to say that I was there during the whole show," Mashaie said.

The government on 7 January arrested a number of suspected Sunni militants for a bomb attack in Zahedan. "The people behind this (bombing) have been identified. They are supporters of Abdolmalek Rigi," Deputy Interior Minister Mohammad Baqer Zolghadr told Fars. Rigi leads the militant group Jandallah."This group has been confronted several times and some of its elements have been arrested. But we cannot yet confirm whether these people were the bombers".The December car bomb killed one person.

The Sunday Times on 7 January reported that Israel had plans to nuke Iran's own nuclear facilities. Israel vehemently denied the story, which some analysts saw as an attempt to increase the pressure on the US and Europe to further isolate Iran. The story said two IAF squadrons were training to drop low-yield bunker busters on the Natanz uranium enrichment plant. It went on to say Mossad believed Iran will soon have enough highly enriched uranium to make a bomb within two years.

Jomhuri-ye Islami and Hamshahri attacked Ahmadinejad on 10 January. "One day you announce that we are installing 3,000 centrifuges, the next day you say 60,000. This gives the impression that what you say has not been well thought out," said Jomhuri-ye Islami. Hamshahri, a more moderate paper, said: "At the very moment that the nuclear issue was about to move away from the UN Security Council, the fiery speeches of the president have resulted in the adoption of two resolutions (against Iran)."

US forces on 11 January raided an Iranian office in Irbil. Iran said the building was a consulate, the US said it was not. Iraq said it was a liason office that was in the process of being turned into a consulate. Five Iranians were take by the US, along with computers and documents. Iran has vigorously protested the episode, calling it "an act of terrorism." Condoleezza Rice had earlier said: "Around Christmastime we did find a group of Iranians who were engaged in activities that were detrimental to our forces. We went, we took them, we then told the Iraqi Government that they needed to be expelled from the country and they were. The Iranians need to know, and the Syrians need to know, that the United States is not finding it acceptable and is not going to simply tolerate their activities to try and harm our forces or to destabilize Iraq.

The daily Iran newspaper reported on 10 January that the government would finally instigate petrol rationing in 1386, the year starting on 21 March. "The cabinet has agreed upon implementing the plan to ration gasoline in the next [Iranian] year," it said. The Majlis must approve the plans. The former head of National Iranian Oil Refining & Distribution Company, the Oil Ministry company responsible for petrol supply, said a subsidy on petrol had cost $13.5 billion last year.

President Ahmadinejad, on a visit to South and Central America, agreed to set up a $2 billion social investment fund with Venezuela's Hugo Chavez on 14 January. The pair said the fund would finance projects in their own countries alongside others in South America and Africa. "We must be comrades in the construction of both our countries," said Ahmadinejad. "We have the potential of being among the most advanced countries in the world."

I came back from a three-week break last week to find Tehran a tenser place than it was before. The pressure from outside has risen unmistakably and friends now talk about the possibility of war with more conviction than before I left. A friend today told me that some people are panic buying rice and canned foods. These periods of pressure have come and gone in the past. Will this prove to be just another red herring? The danger is that Iran and its Western foes will talk themselves into precarious corners. They have made vehement statements of intent and it can be difficult to climb down from such strong words.