Iran resembles a double-headed eagle, trying to fly in opposite directions at the same time. One head represents the Khomeinist revolution, with its forlorn ambition of exporting a bankrupt ideology and creating an Islamic superpower to confront the American “Great Satan” and establish Islam as the only faith of mankind.

The other head represents the Iranian nation-state, one of the oldest in the world, that has little interest in Islamic piety, let alone militancy. For instance Tehran, with a population of 12 million, has just over 700 mosques, compared with 2,600 in Riyadh, the Saudi capital, with two million inhabitants. A poll conducted by a state-owned company in Tehran in February revealed that 70 per cent of Iranians had a favourable view of the US (which is thus more popular in Iran than in Britain, let alone in France and Germany).

More than 60 per cent of Iran’s population of 70 million is aged under 30 and cannot clearly remember life before the Islamist revolution of 1979. The country is unable to provide the educational, leisure and job opportunities its discontented youth needs. In terms of disposable individual income the average Iranian today is 50 per cent poorer than in 1977. A report by the International Monetary Fund on brain-drain puts it at No 1 among 91 developing nations. Each year up to 180,000 highly educated Iranians emigrate, mostly to North America, and there are more Iranian doctors in Canada than in Iran. Youth unemployment hovers around 30 per cent. This discontented generation, yearning for a more liberal and open society, should give the US cause for hope of evolutionary regime change.

For the past eight days, thousands of students have been protesting against the regime in Iran. Starting in Tehran University, the movement has spread to campuses in other cities. It has also attracted some middle-class support, while industrial workers in a number of cities have held walkouts in solidarity.

The Khomeinist Establishment is no longer strong enough to crush its opponents, as it routinely did throughout the 1980s and 1990s. The armed and police forces have made it clear that they will not shoot anti-regime demonstrators and the regime’s hired thugs, known as the Followers of the Party of God (Ansar Hezbollah), are not numerous enough or confident enough to beat opponents and disperse demonstrations. Yet Iran is not on the verge of a second revolution or civil war, as some commentators suggest. The volcano, hissing menacingly, is unlikely soon to erupt.

The students’ demand for constitutional change seems to have some support within the Establishment. More than two thirds of the members of the Islamic Majlis (parliament) have published an open letter to Ayatollah Ali Khamenei, the spiritual leader, to endorse the call for the separation of mosque and State. Another open letter, signed by 250 intellectuals with impeccable Khomeinist credentials, goes further by calling for the establishment of a Western-style democratic system.

A consensus may yet emerge inside Iran for change through a referendum. One popular idea is to remove two articles of the Constitution and amend six others, thus separating the mosque from the State. Under the proposals the position of Supreme Guide, held by Ayatollah Khamenei, would be abolished, allowing Iran to become a “normal” republic with a president and parliament elected by and accountable to the people.

Today hardly anyone, even within the Establishment, is prepared to defend the principle of Velayat-e Faqih (Custodianship of the Cleric) under which a mullah, the Supreme Guide, is regarded as the embodiment of divine will on earth and given absolute powers.

The claim last week by Khamenei that the demonstrations were organised by American mercenaries was part of an initial panic reaction by a frightened regime. Since then wiser counsel seems to have prevailed. Now, even Khamenei’s associates admit that the pro-democracy movement is too broad-based to be dismissed as part of the pressure that the Bush Administration is exerting on the regime.

The American presence in countries neighbouring Iran, especially Iraq and Afghanistan, has put the fear of God in the Khomeinist Establishment. This does not mean, however, that there is any support for an aggressive posture by the US among the demonstrators. The threat of American military action could backfire by triggering an Iranian nationalistic reflex, giving succour to the hardliners.

As Iran enters a delicate phase in its internal political evolution, it is important that the US and the EU be on the same side in dealing with Tehran. Pressure on such issues as nuclear non-proliferation and Tehran’s sponsorship of terrorism must be accompanied by support for the prodemocracy movement, and promises of aid and trade in exchange for reform.

Dealing with Iran requires tact and patience. Broadly speaking, Iran is on the right path, although zigzags and even temporary reversals cannot be ruled out. Less chatter about regime change by hot-heads in Washington circles would help Iran’s moderates.

The author is an Iranian commentator on Middle Eastern affairs.

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