"President" Mahmoud Ahmadinejad – and the quotation marks are becoming ever more appropriate in Iran today – is in real trouble. There are now three separate official inquiries into his supposed election victory and the violence which followed, while conservative Iranian MPs fought each other with their fists at a private meeting behind the assembly chamber, after Ahmadinejad's members objected to an official's reference to the "dignity" with which the opposition leader, Mirhossein Mousavi, answered parliamentary questions. Those close to the man who still believes he is the President of Iran say that he is himself deeply troubled – even traumatised – by the massive demonstrations against him across the country.

Tens of thousands of Mousavi supporters marched in black through the streets of central Tehran yesterday evening, in an emotional demonstration of mourning – the second in two days – for the post-election dead. In a city symbolised by its brutal traffic and decibel records, they walked in total silence for three miles, holding banners and posters lamenting the killings in Azadi Square and Tehran University and in other Iranian cities. And they had no doubts about the political – and physical – risks they were taking.

A chemical engineer walking at the centre of the huge black trail thought for several seconds when I asked him what happens next. "Nobody knows but we think of this all the time," he at last replied. "We cannot stop now. If we stop now, they will eat us. The best is for the United Nations or some international organisations to monitor another election." Upon such illusions is disaster built.

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But the same man's wife had a humour that almost belonged to the vast black crowd yesterday. She was a commercial lawyer but had studied psychology. "If we let go now, we are going to face someone like Pinochet – and our dictators here are not even up-to-date dictators," she told me without a trace of a smile. "My psychological training is very useful. Ahmadinejad has a classic psychosis problem. He lies a lot and he's hallucinatory and the problem is, he thinks he's related to someone up there!" And here, the lady pointed upwards in the general direction of heaven. But no jokes about religion. These marchers were chanting the Muslim "salavat" prayer, giving greetings to the Prophet Mohamed and his family.

And just as well. For this morning, the Supreme Leader, Ali Khamenei, is to lead Friday prayers at Tehran University – the same campus upon which seven young men were shot dead by pro-Ahmadinejad Basiji militiamen on Sunday night – and Mousavi is promising to bring his own supporters, wearing black arm-bands of mourning for the dead, to demonstrate their loyalty to Khamenei himself. Ahmadinejad's acolytes have been claiming that the opposition is trying to overthrow the Islamic Republic as well as Khamenei, a dangerous slander in any revolution here but a particularly incendiary one today.

The opposition suspects that Khamenei will try to restore order by telling Mousavi and his people that they have been allowed their massive demonstrations and that, despite "unfortunate incidents" – that wonderful autocratic cliché has actually just been used by parliament Speaker Ali Larijani – this was a generous and democratic act by the government. But, Khamenei is expected to say, enough is enough. Any groups disturbing the peace this weekend will be regarded as counter-revolutionaries and dealt with "according to the law" (a favourite Khamenei expression).

If so, Mousavi and his advisers – they include former president Mohammad Khatami as well as Mousavi's election ally, Mehdi Karroubi – will have to behave with immense sensitivity if they are not to be trapped into silence by such a warning. Their problem is almost intractable. If they continue the protest marches, they can be accused of breaking the law – and the waning strength of the marches no longer brings the people of Tehran on to their balconies and rooftops – but if they bring the protests to an end, the Basiji and the cops become kings of the street.

Indeed, the arrest of the Islamic Republic's first foreign minister, Ibrahim Yazdi – he was taken, quite literally, from the bed of his Tehran hospital where he is suffering from prostate cancer – shows just how high the level of suspicion is amid the heights of the Islamic Republic. No one has managed to suggest a sane reason why a man who worked alongside the founder of the Islamic regime, Ayatollah Khomeini himself, should suddenly disappear before our eyes. Yazdi had urged Iranians to boycott the presidential poll four years ago – the election that brought Ahmadinejad to power – but was urging all Iranians to vote last week.

If anyone needed proof of the government's state of indecision, they had only to look at yesterday's Tehran newspapers. Suddenly, the mass demonstrations were acknowledged in full. A whole front page of photographs showed Wednesday afternoon's Mousavi rally. Ahmadinejad had said at the weekend that his opponents were mere "layers of dust" – an unwise as well as a childish remark – but across one photograph, demonstrators can be seen carrying a banner which reads: "The layers of dust are making history."

Other papers showed Iran's top six football stars playing South Korea in Seoul with Mousavi's campaign green ribbons tried to their wrists. They complied with instructions to take them off for the second half of the match – which was broadcast live across Iran and which turned out to be a draw. Even Mousavi's website is no longer blocked. We may ask what all this means. But so does all of Iran.

It was clear, however, even before the right-wing MPs turned to fisticuffs, that the authorities simply did not know how to handle this unprecedented revolt – not revolution – by so many millions of Iranians. With a more intelligent, thoughtful, less arrogant man in power, it might be possible to look for a political compromise, perhaps some tinkering with the constitution to create a vice-presidency (not that Mousavi would accept it) or even recreate the post of prime minister which was held by Mousavi himself during the 1980-88 Iran-Iraq war.

But who wants to work with Ahmadinejad? His efforts to improve the lot of the millions of Iranian poor – their existence, of course, is a blight upon the moral reputation of any republic which controls so much oil wealth – have been genuine and well received. His meretricious doubts about the Jewish Holocaust, his foolish rhetoric about Israel, his constant comparison of the Iranian election to a football match, are of no interest to them. But Mousavi can scarcely work with such an unpredictable, unstable figure.

Ahmadinejad's colleagues have been claiming that the vandalisation of property, including the destruction of computers at Tehran University – an act with absolutely no intelligent explanation – was committed by "traitors", but the government's own investigative committee is now saying that plain-clothed agents were involved.

It all leaves "President" Mahmoud Ahmadinejad a very lonely man.

Day 6 of Iran crisis

* In an attempt to defuse calls for a rerun, Iran's Governing Council promised to listen to the candidates "express their ideas" about the election. It also said it was examining 646 complaints.

* Meanwhile, it was clear where President Ahmadinejad wanted to place the blame for the crisis. He told his cabinet that the vote's legitimacy was being questioned because it was a "challenge to the West's democracy."

* Also focusing on foreign elements, the Intelligence Ministry said that it had uncovered proof of a bomb plot backed by American elements. The bombs were apparently supposed to go off in polling stations on election day.

* Iranian television showed former president Hashemi Rafsanjani's daughter, Faezeh Hashemi, rallying protesters. Hardliners accused her and her brother, Mahdi, of treason. The two were later barred from leaving Iran.

* In an echo of Twitter's decision to cancel planned maintenance to help protesters, YouTube broke from its usual policy of barring violent videos so that Iranians could "capture their experiences for the world to see".