Tehran - It was not the best of years for Iranian President Mahmoud Ahmadinejad.

As 2008 drew to a close, the president had yet to realize his promised reforms, and Iran once again faced growing inflation at home and increasing isolation abroad.

The country's economic problems, with inflation soaring beyond 30 per cent, served to increase the number of Ahmadinejad's critics, even among the conservatives who once supported the president.

Widespread criticism led to the formation of a "neo-conservative" faction which won parliamentary elections and appointed Ali Larijani as its leader and speaker of the legislature.

Larijani resigned as Ahmadinejad's chief nuclear negotiator in 2007 over grave differences with the president, and since then has emerged as one of his strongest critics.

The year also saw a series of resignations from cabinet. The ministers of economy, education and interior affairs, along with the Central Bank governor, were replaced due to disagreements with Ahmadinejad.

A big embarrassment for the president was his designated interior minister, Ali Kordan, who presented the parliament with an honorary doctorate from Oxford University which later turned out to be a fake.

Although Ahmadinejad tried to evade the dilemma, the parliament stood its ground and dismissed the minister, forcing the president to nominate a new candidate for the interior ministry post.

In the nuclear sphere, Iran once again rejected international demands to suspend its controversial enrichment programmes, and earned itself another United Nations Security Council resolution and economic sanctions.

New offers of incentives from the West, personally delivered in June to Tehran by European Union foreign policy chief Javier Solana, were rejected by Iran. Ahmadinejad made it clear that no incentives would make Iran suspend its nuclear programmes.

Iran's missile tests, including rockets launched for satellite research, caused renewed concern in the West that in a secret Iranian nuclear programme, medium-range missiles with nuclear warheads would be fired towards arch-enemy Israel. Tehran has categorically denied having a secret nuclear programme or any plans to attack the Jewish state.

In order to confront its growing international isolation, Islamic Iran has turned towards leftist governments in Latin America such as Bolivia, Ecuador, Nicaragua and Venezuela, although observers doubt the new political trend will have many positive results.

Tehran is counting on the election of Barack Obama as US president to put an end to almost three decades of political hostility with Washington.

Ahmadinejad congratulated the president-elect and said he hoped Obama's slogan of change would not just be superficial, but lead to a real change.

There could also be a political change in Iran in the coming year, with presidential elections scheduled for June 2009.

Both neo-conservatives dominating the parliament and the reformist opposition hope to remove Ahmadinejad from the presidency, especially as the country's economic problems have drastically decreased the number of the president's supporters.

Among favoured rivals to compete with Ahmadinejad are reformist former president Mohammad Khatami and moderate Tehran mayor Mohammad-Baqer Qalibaf, but neither has yet declared as candidate.

Analysts believe a high turnout in June's elections could bring a power change in Iran, but if the silent majority should again boycott the polls, Ahmadinejad's chances for re-election would increase. (dpa)