President Mahmoud Ahmadinejad flexes Iran's muscles at the UN General Assembly this week, putting on a brave international face after domestic unrest has put the brake on its ambitions to become a Shiite powerhouse in a predominantly Sunni region, Gulf analysts say.
His disputed victory in the presidential election of June 12 triggered a wave of popular and deadly protest unprecedented since the establishment of the Islamic Republic in 1979.
It came as Iran faced continuing economic problems and three sets of international sanctions imposed for refusing to suspend its controversial programme of uranium enrichment, which the West fears could be a cover to develop nuclear weapons.
"Iran is now going through a serious internal crisis, which demonstrates that its youth are tired" of their country's intervention in the region, said Sami al-Faraj, head of the Kuwait Centre for Strategic Studies.
"This country faces so many problems that it would not be able in the short term to foment civil war or clashes between Shiites and Sunnis in neighbouring states," he said of Iran's Shiite-majority neighbour Iraq.
Plagued by economic difficulties, with unemployment running at 12.5 percent in 2008, according to Western statistics, the central bank in Tehran reported inflation of 20.2 percent in August after peaking last September at 29 percent.
"Iran cannot offer the image of itself as a model state" for public opinion among Arabs disillusioned by their own political systems, according to Faraj.
The sole exception may be Lebanon's Iran-backed Shiite Hezbollah movement, three years after Arab public opinion lent the militant group full support in its short but bloody war against Israel in the summer of 2006, he added.
Hezbollah's rise, the emergence of a Shiite government in Iraq after the fall of Saddam Hussein's Sunni regime, the Damascus-Tehran alliance and Iranian support for Palestinian Islamist group Hamas have all fuelled Iranian regional ambitions, sparking concern among Gulf Arab monarchies.
"Iran has used the religious element for political gain" and "it clearly wanted to intervene in Arab affairs," said Abdel Aziz al-Sagr, chairman of the Gulf Research Centre in Dubai.
But he said Iran could no longer continue its politics of "intervention" in Iraq, Lebanon and more recently "in the war in Yemen between the government and the Shiite rebels in Saada province bordering Saudi Arabia," the spiritual home of Sunni Islam.
On the Palestinian issue Sagr said Tehran's "goal is not the liberation of Jerusalem" as it claims. He said Iran had not hesitated to "cooperate with Israel to purchase arms for its war with Iraq from 1980 to 88."
Bahraini analyst Ali Fakhrou believes that mistrust between Arabs and Iranians should not prevent dialogue.
"Iranian-Arab relations are at their lowest since the Iran-Iraq war," the former minister said, adding that "there are forces on both sides who are climbing."
"A rational dialogue is necessary for a consistent agreement on red lines that are not to be crossed," he said, admitting however that such dialogue was "impossible in the near future because of the situation on both sides."
In Tehran, Mohammad Saleh Sadeqian, director of the Arab Centre for Iranian Studies, said the problems faced by the Iranian government will not change its policy towards the Middle East.
"The recent events have no impact on Iran's strategy in the Middle East," he said, adding that "the imperatives of Iran's national security justify its growing influence in some parts of the Arab world.
"Dialogue is necessary for an agreement on a roadmap that serves the interest of both parties," using geography, history and religion as a basis for coexistence, he said.
But Ahmadinejad has more immediate pressing international concerns to address, with Israel -- widely considered to be the Middle East's sole if undeclared nuclear power -- saying its options remain open on how to respond to Iran's nuclear ambitions.
Tehran also faces high-profile international talks on October 1 with the six world powers on its latest package of proposals over its nuclear programme.
"No power will ever dare to think of launching aggression against Iran. Today, Iran is experienced and powerful," Ahmadinejad said as he addressed the nation on the anniversary of the breakout of the Iran-Iraq war in 1980.
He made the remarks on Tuesday, shortly before leaving for New York and the UN General Assembly.
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