18. Telegram From the Embassy in Iran to the Department of State1

967. While Mansur during first weeks in office has rightly concentrated on economic matters, one major political problem that has arisen to plague him and Shah is how to deal with the recently released Ayatollah Khomeini. As we see it, following factors bear on situation.

Although idea of releasing Khomeini prior to Moharam period originated with previous govt and although ultimate decision was made by Shah, it was Mansur and Pakravan who seem to have precipitated the problem by urging the Shah to let Khomeini go. Mansur thus has certain responsibility for outcome.
Khomeini’s latest activities and notably his speech of April 15 (reported NIT–6441) place govt in dilemma. If he is permitted to go on agitating, this will involve loss of prestige to regime and can snowball into serious trouble; but if he is re-arrested, especially during sensitive period just before and during Moharam, this could also cause serious trouble.
There is little reason to doubt that regime is able to control or, if necessary, beat down any manifestations during Moharam period, starting evening May 12. Determination shown by regime during Moharam riots last year is in itself an important factor discouraging repetition of disorders.
One of most interesting features of Khomeini’s statements is his appeal for constitutional govt, which intrigues National Front which otherwise has little reason to sympathize with Mullahs. Speech also attacked arms expenditures, relations with Israel, featured xenophobic themes (including claim that govt is “giving away our resources to foreigners”) and by implication attacked the Shah himself and the entire reform program. We understand tapes of April 15 speech are circulating in Tehran opposition circles and National Front elements are now considering cooperating with Mullahs.
Although there are signs that economy is picking up, the social background of urban unemployment and misery, especially in Tehran’s south side, is essentially unchanged from last year. In bazaar, Khomeini has continued to have many sympathizers, and as far as we can tell his prestige has, if anything, increased in that quarter since his release.
Govt is playing this very carefully so far. Warnings have been sent to Khomeini, and we have no information of political statements by him since April 5 although he made it clear on that occasion that he intends to ignore the warnings. April 23, religious holiday, saw usual large crowds in Qom (estimated by one source at 50,000) and substantial numbers came to “Kisyrand,” but it is possible that Khomeini has subsided at least for a while. We understand, however, that recording of his April 15 speech was played at Qom mosque on April 24.

Our tentative conclusion is that, if Khomeini persists, Shah is most likely to order his re-arrest prior to Moharam; that govt is capable of controlling or countering any possible demonstrations stirred up by Khomeini (or his arrest); but that showdown may be postponed until after the holiday period. Will submit another estimate as we come closer to Moharam.

  1. Source: Department of State, Central Files, POL 23–9 IRAN. Confidential. Repeated to London, CINCMEAFSA for POLAD, Ankara, Baghdad, Cairo, Jidda, Karachi, and Kuwait.