Two years ago today, Iranians cast ballots in a presidential election that would yield violence and change in the Islamic Republic like no vote before it.

In an election marred with allegations of blatant fraud, President Mahmoud Ahmadinejad was given a landslide reelection victory that was hailed by supreme leader Ayatollah Ali Khamenei as a “divine assessment.”

Yet today the testy president and his aides have challenged the power of Mr. Khamenei. Conservative rivals now dismiss them as a “deviant current” obsessed with the imminent return of the Shiite messiah.

Close aides have been arrested for sorcery and witchcraft, and there is talk that Mr. Ahmadinejad will not survive the rest of his four-year term. The leader’s deputy representative to the Revolutionary Guard even declared this week that “the current of deviation … is the gravest danger in the history of Shiite Islam.”

So while the regime was successful in brutally putting down the largest popular protests since the 1979 Islamic revolution, it appears anything but triumphant today.

Iran’s unique system of government – a blend of preeminent theological and declared democratic values that are often in tension with each other ­– once sought to offer a model to the world.

Instead, even as hard-line leaders proclaim the Islamic Republic to be at the peak of its powers, the events of the past two years have exposed political dysfunction.

Iran “simply has not developed the institutions and rules that are needed to prevent very unsettling change,” says Farideh Farhi, an Iran specialist at the University of Hawaii at Manoa. “So rather than moving toward stabilization … what we see is a system that is constantly faced with deepening political turmoil.”

Reformists' hopes are fading

Two years ago, reformists' dream of change appeared for a moment real, in a ballot cast for Mir Hossein Mousavi, who they hoped might finally loosen the strictures of Iran’s self-proclaimed “government of God.”

But the immediate declaration that the archconservative Ahmadinejad had won by a large margin prompted cries of fraud, and weeks of unrest by millions of protesters asking “Where is my vote?”

Regime enforcers took to the streets in a crackdown that left scores if not hundreds dead, and countless portraits of Iran’s supreme religious leader Khamenei were burned and trampled upon.

The pro-democracy Green Movement was bludgeoned off the streets – an act that continued today, according to opposition websites, which reported that security forces “attacked the crowd with electric batons” during a modest gathering of people at a downtown square.

Today this chant was heard: “Khamenei should know, he’s soon to go.”

The vicious infighting between conservative factions has brought little hope to Green Movement sympathizers, however. In the latest blow, they woke to the second anniversary today to news that imprisoned journalist and opposition activist Hoda Saber had died in prison from a heart attack after a 10-day hunger strike.

"Today I sat at this computer and wept for an hour ... because I couldn't understand the point of another death; a hunger strike, any action, for such a sick and stupid nation," said one Green Movement supporter contacted in Tehran.

"I won't be going out today for the silent pavement crawl," she adds. "I don't know why they go out today. The factions between the Leader and Ahmadinejad are eating each other alive; why distract them from the carnage and feed them our own?"

Khamenei's approach criticized as reactive

Khamenei has sought to quell the power struggle, which erupted in April when the president fired from his cabinet the intelligence minister. Khamenei, who makes all final decisions of state and vets key security posts, reinstated the minister.

Ahmadinejad refused to attend any meetings for 11 days, and finally acquiesced. But not before a tidal wave of criticism had built up charging arrogance on his part.

The president was being targeted so ferociously that it could not have come without the supreme leader’s blessing.

“It suggests [Khamenei] doesn’t have a very long-term vision,” says Ms. Farhi. “He constantly accuses other Iranian political elites of lacking wisdom, but his actions of the last several years have shown … a very improvised and reactive manner … focused on the survival and the strength of his office, rather than building institutions.”

Crucial tests coming up

Crucial tests are on the horizon, beginning with elections to the parliament, or Majlis, in March 2012. Then two years from now, in June 2013, will be the next presidential vote – though that is a lifetime away in Iranian political terms.

"From divinity to deviancy, isn't that the path of all theocracies?" asks one Iranian analyst now living in London, who, like more than 4,000 others, was arrested during the 2009 postelection unrest.

"Unfortunately for Iran, Ahmadinejad is incapable of long-term planning and all he sees right now is the coming Majlis elections," says the analyst. "[He] thinks his supporters inside the Majlis will secure his presidential seat. Khamenei prefers Ahmadinejad to finish a quiet full term in office. Whether he gets to or not is up to Ahmadinejad."

But the president has shown little sign of keeping quiet, nor have his right-wing opponents shown any sign of letting up.

Protesting higher gas and electricity bills

And there are other problems. Iran’s economy is not helped by United States and United Nations sanctions. And Ahmadinejad has overseen an unpopular removal of subsidies on everything from utilities to gasoline.

Serious protests have not broken out, as some predicted. But there has been another form of protest: Some people have gone to the shrine of Ayatollah Ruhollah Khomeini – the father of revolution, who promised free bus rides, housing, and education – and pushed their recently raised gas and electricity bills through the slits meant for donations.

"I am exhausted and am wondering if it's not better to be bored in Barnsley, [England, or] woebegone in Winnipeg, [Canada, rather] than to be a nationalist standing firm in [Iran]," says the disheartened opposition voter in Tehran.

"We went out two years ago and our kind of [Westernized middle-class] people got killed and arrested. Now it's the turn of the people who are whining about their gas bills ... who are soon to have [nothing] to lose. Let them go out.”

Some appeared to do so today.

“A large part of Iranian society has just tuned out,” says Farhi in Hawaii. “They say, ‘These people are crazy. Let them continue their fight. Once they bloody themselves completely, maybe we will come back to the conversation.’ ”