Michael Axworthy: This inauguration did little to hide the scars that still divide Iran

The inauguration was another mixed success for the hardline leadership circle in Iran. They have succeeded in brazening out the dubious election result but at the expense of another day of demonstrations. The Supreme Leader's recent speeches have been defiant – but their strongest message has been that the ruling elite should stick together for fear of the consequences for them if the system, as it has run the country for 30 years, should collapse.

It is not just that the regime has all but given up the effort to address the true situation or the Iranian people's call for genuine representative government – they no longer even look very confident. In recent weeks former president Rafsanjani used Friday prayers – itself a State occasion in the Islamic republic – to express doubts about the election and to emphasise the essential point – that the Islamic republic was set up not as an Islamic autocracy, but as a republic, a state belonging to the people, replacing the oppressive autocracy of the Shah. Whatever the distortions and irrespective of the ways the regime have eroded the democratic element in the system since 1979, that was the deal at the time, and it is not just a few middle class students in Tehran who are angry at the blatant subversion of that deal by the manipulation of this latest election – it is many others, including poorer Iranians, older Iranians, citizens of provincial cities, veterans of the Iran/Iraq war and others.

In between, Khamenei and Ahmadinejad have fallen out over official appointments, and have blamed Western governments for stirring up trouble over the election. The Western governments hold aloof, awaiting events, and unsure how to proceed. The urgency of engaging Iran to address the nuclear problem has not lost its logic, but to make a historic step toward engagement with Iran at just this juncture, when its leaders look less legitimate than ever, is hardly a prospect President Obama can relish.

Most significantly, many members of the ruling elite itself, and many senior ayatollahs, are unhappy with the turn of events since 12 June. The demonstrators and the ordinary Iranians calling "Allahu Akbar" from the roofs show no sign of going away.

Last week demonstrators marked the traditional 40th day of mourning for Neda Agha Soltani. Some were dispersed with teargas, but elsewhere there seems to have been fraternisation between demonstrators and security forces. It seems unlikely events like yesterday's inauguration will be enough to discourage the Opposition.

In 1978, the 40-day mourning period served to rack up demonstrations against the Shah, inexorably building and consolidating the revolutionary movement. It is an ominous precedent whose significance will not have been lost on Khamenei and Ahmadinejad.

Professor Michael Axworthy is author of Iran: Empire of the Mind