Trump’s Iran Strategy Sharpens Power Struggle in Tehran

US President Donald Trump speaks about the Iran deal from the Diplomatic Reception room of the White House in Washington, DC, on October 13, 2017. (AFP PHOTO / Brendan SMIALOWSKI)
US President Donald Trump speaks about the Iran deal from the Diplomatic Reception room of the White House in Washington, DC, on October 13, 2017. (AFP PHOTO / Brendan SMIALOWSKI)
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Trump’s Iran Strategy Sharpens Power Struggle in Tehran

US President Donald Trump speaks about the Iran deal from the Diplomatic Reception room of the White House in Washington, DC, on October 13, 2017. (AFP PHOTO / Brendan SMIALOWSKI)
US President Donald Trump speaks about the Iran deal from the Diplomatic Reception room of the White House in Washington, DC, on October 13, 2017. (AFP PHOTO / Brendan SMIALOWSKI)

London- Although it had been expected for months, US President Donald Trump’s unveiling of his new strategy on Iran seems to have taken the ruling elite in Tehran by surprise, intensifying the power struggle within it.

The radical faction close to “Supreme Guide” Ayatollah Ali Khamenei had expected Trump to tear-up the so-called nuclear deal, depriving the rival faction known as Rafsanjani’s orphans led by President Hassan Rouhani, of their main propaganda plank.

That Rouhani is anxious to pretend that the nuke deal remains intact is a sign of his faction’s failure to work out any alternative policy. If he denounces the deal, he would be validating Trump’s claim that Tehran never intended to abide by the rules. Such move would, in turn, persuade the Europeans and perhaps even Russia and China to tone down their support for Tehran against Washington.

“We intend to remain committed to the nuclear deal,” Rouhani said Friday night, “for as long as others continue to respect it.”

That was a strange position since one of those “others”, the US, had already announced it would not abide by the deal as it stands now.

“We hope that others will not follow Trump’s lead,” says Hessameddin Ashna, Rouhani’s chief political adviser. This means that Rafsanjani’s Orphans are determined to stick to the “deal” even when and if the US renders it meaningless.

For the deal to work in favor of Iran it is important that international banks and businesses resume treating the country as a normal partner.

Two years after the nuclear deal was announced, this hasn’t happened. The reason is that companies and banks are not sure that by doing business with Iran they would not risk running into trouble with US rules and regulations. Fear that the sanctions that were suspended under the nuclear deal could be snapped back at any time has prevented Iran from attracting any significant foreign investment.

For the same reason Iran has failed to regain access to world capital markets and banking services. Today, even Iranian embassies abroad are not allowed to open bank accounts and are forced to pay their staff in cash. Tehran is also forced to pay the militant groups it backs, notably Hezbollah in Lebanon, Islamic Jihad in Gaza and the Houthis in Yemen with suitcases filled with dollars.

However, Rouhani and his faction, which includes former President Muhammad Khatami, may not be totally unhappy with Trump’s move because the US president singled out the Revolutionary Guard Corps (IRGC), which is controlled by Khamenei, as the main culprit. The Rouhani faction is now harping on the theme that had it not been for the IRGC, the nuclear deal would have borne real fruits for Iran.

However, Trump, according to the daily Kayhan, believed to be a mouthpiece for Khamenei, chose a “more devious method” by not formally denouncing the deal while making it clear the US will intensify sanctions against Iran. This means that “Iran will continue to comply with the deal while the US refuses to abide by its pledges,” the paper says.

The IRGC is clearly happy that, despite months of rumors, Trump did not ask the US Congress to declare it a “terrorist organization”.

According to Kayhan, Trump “dared not” classify the IRGC as “terrorist.” The reason, Kayhan says, was “the stern warning” given by IRGC Commander General Muhammad-Ali Aziz Jaafari.

IRGC spokesman Gen. Massoud Jazayeri has also highlighted IRGC’s message of defiance.

“We intend to intensify our support for suffering peoples fighting for their rights everywhere, most notably in the Middle East,” he said.

The message was further amplified by Quds Corps Commander General Qassem Soleimani. He ended weeks of seclusion with a lightning trip to Iraq after which he posted his “selfies” all over the official media. The message was that he remains very much in business.

The IRGC also tried to dismiss Trump’s order for imposing economic sanctions on the IRGC’s business wing. That business wing, known as the Khatam al-Anbia Conglomerate, controls over 100 companies with a presence in Dubai, Oman, Austria, Cyprus, Greece and Turkey.

On Saturday, General Ibad-Allah Ibadi, the head of the conglomerate, inaugurated a new steel mill with a fiery speech about the IRGC’s determination to expand its business activities across the globe.

“Despite Trump’s forlorn attempts many around the world are keen to do business with us,” he claimed.

While Khamenei has maintained silence, at least at the time of this writing, spokesmen for the rival factions have tried to minimize the impact of Trump’s dramatic move in different ways.

Rouhani is beating the drums about a promise by French President Emmanuel macron to visit Tehran next year as a sign that Iran can ignore the US and “work with European and other partners.”

Rouhani’s rival in the recent presidential election, Ayatollah Ibrahim Raiisi, however, has called for a “full adoption of Resistance Economy” which means forgoing foreign trade and adopting a North Korean style system of self-sufficiency.

For the time being, the rival factions are jumping and gyrating much like angry cats meaning to spring at each other. Without knowing it, perhaps, under the surface, Trump may have sharpened the power struggle in Tehran.



To Get Their Own Cash, People in Gaza Must Pay Middlemen a 40% Cut

A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
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To Get Their Own Cash, People in Gaza Must Pay Middlemen a 40% Cut

A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)

Cash is the lifeblood of the Gaza Strip’s shattered economy, and like all other necessities in this war-torn territory — food, fuel, medicine — it is in extremely short supply.

With nearly every bank branch and ATM inoperable, people have become reliant on an unrestrained network of powerful cash brokers to get money for daily expenses and commissions on those transactions have soared to about 40%.

"The people are crying blood because of this," said Ayman al-Dahdouh, a school director living in Gaza City. "It’s suffocating us, starving us."

At a time of surging inflation, high unemployment and dwindling savings, the scarcity of cash has magnified the financial squeeze on families — some of whom have begun to sell their possessions to buy essential goods.

The cash that is available has even lost some of its luster. Palestinians use the Israeli currency, the shekel, for most transactions. Yet with Israel no longer resupplying the territory with newly printed bank notes, merchants are increasingly reluctant to accept frayed bills.

Gaza’s punishing cash crunch has several root causes, experts say.

To curtail Hamas’ ability to purchase weapons and pay its fighters, Israel stopped allowing cash to enter Gaza at the start of the war. Around the same time, many wealthy families in Gaza withdrew their money from banks and then fled the territory. And rising fears about Gaza’s financial system prompted foreign businesses selling goods into the territory to demand cash payments.

As Gaza’s money supply dwindled and civilians’ desperation mounted, cash brokers' commissions — around 5% at the start of the war — skyrocketed.

Someone needing cash transfers money electronically to a broker and moments later is handed a fraction of that amount in bills. Many brokers openly advertise their services, while others are more secretive. Some grocers and retailers have also begun exchanging cash for their customers.

"If I need $60, I need to transfer $100," said Mohammed Basheer al-Farra, who lives in southern Gaza after being displaced from Khan Younis. "This is the only way we can buy essentials, like flour and sugar. We lose nearly half of our money just to be able to spend it."

In 2024, inflation in Gaza surged by 230%, according to the World Bank. It dropped slightly during the ceasefire that began in January, only to shoot up again after Israel backed out of the truce in March.

Cash touches every aspect of life in Gaza

About 80% of people in Gaza were unemployed at the end of 2024, according to the World Bank, and the figure is likely higher now. Those with jobs are mostly paid by direct deposits into their bank accounts.

But "when you want to buy vegetables, food, water, medication -- if you want to take transportation, or you need a blanket, or anything — you must use cash," al-Dahdouh said.

Shahid Ajjour’s family has been living off of savings for two years after the pharmacy and another business they owned were ruined by the war.

"We had to sell everything just to get cash," said Ajjour, who sold her gold to buy flour and canned beans. The family of eight spends the equivalent of $12 every two days on flour; before the war, that cost less than $4.

Sugar is very expensive, costing the equivalent of $80-$100 per kilogram (2.2 pounds), multiple people said; before the war, that cost less than $2.

Gasoline is about $25 a liter, or roughly $95 a gallon, when paying the lower, cash price.

Bills are worn and unusable

The bills in Gaza are tattered after 21 months of war.

Money is so fragile, it feels as if it is going to melt in your hands, said Mohammed al-Awini, who lives in a tent camp in southern Gaza.

Small business owners said they were under pressure to ask customers for undamaged cash because their suppliers demand pristine bills from them.

Thaeir Suhwayl, a flour merchant in Deir al-Balah, said his suppliers recently demanded he pay them only with brand new 200-shekel ($60) bank notes, which he said are rare. Most civilians pay him with 20-shekel ($6) notes that are often in poor condition.

On a recent visit to the market, Ajjour transferred the shekel equivalent of around $100 to a cash broker and received around $50 in return. But when she tried to buy some household supplies from a merchant, she was turned away because the bills weren’t in good condition.

"So the worth of your $50 is zero in the end," she said.

This problem has given rise to a new business in Gaza: money repair. It costs between 3 and 10 shekels ($1-$3) to mend old bank notes. But even cash repaired with tape or other means is sometimes rejected.

People are at the mercy of cash brokers

After most of the banks closed in the early days of the war, those with large reserves of cash suddenly had immense power.

"People are at their mercy," said Mahmoud Aqel, who has been displaced from his home in southern Gaza. "No one can stop them."

The war makes it impossible to regulate market prices and exchange rates, said Dalia Alazzeh, an expert in finance and accounting at the University of the West of Scotland. "Nobody can physically monitor what’s happening," Alazzeh said.

A year ago, the Palestine Monetary Authority, the equivalent of a central bank for Gaza and the West Bank, sought to ease the crisis by introducing a digital payment system known as Iburaq. It attracted half a million users, or a quarter of the population, according to the World Bank, but was ultimately undermined by merchants insisting on cash.

Israel sought to ramp up financial pressure on Hamas earlier this year by tightening the distribution of humanitarian aid, which it said was routinely siphoned off by militants and then resold.

Experts said it is unclear if the cash brokers’ activities benefit Hamas, as some Israeli analysts claim.

The war has made it more difficult to determine who is behind all sorts of economic activity in the territory, said Omar Shabaan, director of Palthink for Strategic Studies, a Gaza-based think tank.

"It's a dark place now. You don't know who is bringing cigarettes into Gaza," he said, giving just one example. "It's like a mafia."

These same deep-pocketed traders are likely the ones running cash brokerages, and selling basic foodstuffs, he said. "They benefit by imposing these commissions," he said.

Once families run out of cash, they are forced to turn to humanitarian aid.

Al-Farra said that is what prompted him to begin seeking food at an aid distribution center, where it is common for Palestinians to jostle over one other for sacks of flour and boxes of pasta.

"This is the only way I can feed my family," he said.