Speaking to a government-organized throng bused in from around Tehran and as far away as Qom, Iran’s religious capital, and other cities — a crowd, no doubt, vastly inflated by dutiful members of the Iranian Revolutionary Guard Corps and the fascist, mosque-based Basij thugs — Ayatollah Ali Khamenei threw down the gauntlet against the Green Wave.

He said:

“Nothing can be changed. It’s finished, the Presidential campaign.”

He added, as if we didn’t know, that he’s on the side of President Ahmadinejad. “The President was closest to my point of view,” huffed the Leader. And he issued not-so-veiled warnings to Iranian citizens to behave, to “be careful how they are acting, careful what they are saying.”

The election he said, was “a sign from God.” And in case people didn’t get God’s message, he warned of “bloodshed and chaos” if the street protests continue. “Street challenge is not acceptable,” he said.

Make no mistake: it’s by far the most serious, even existential crisis for the Islamic Republic since its founding in 1979. By blatantly rigging the vote, and by their heavy-handed crackdown in the wake of the travesty, the regime has shattered its legitimacy. Its leadership, including Khamenei and Ahmadinejad, are isolated from virtually every important segment of Iranian society — students, workers, intellectuals, the business class, and even the very clergy that is at the heart of the system — and they stand revealed as a repressive, reactionary military dictatorship.

What remains to be seen is whether the opposition will back down in the face of that repressive power.

We’ll know soon. The real explosion could some within a few days, when the so-called Guardian Council — a group of twelve bearded old clerics slavishly loyal to Khamenei — confirms the bogus election results. If they do, as expected, sometime mid-week, it’s possible that the sustained street protests could become a revolution.

From an Iranian source, it appears that for Mir Hossein Mousavi, Ali Akbar Hashemi Rafsanjani, Medhi Karroubi, and other leaders of the movement, there’s no backing down. Here’s what he said:

“Mousavi and the others cannot compromise. They know that if Ahmadinejad remains in power, he will try to eliminate all of them. All of them. And it will be violent.

“The Ahmadinejad people are trying to weaken and destroy the ‘republic’ part of ‘Islamic republic.’ They dislike democracy, they dislike elections, they dislike accountability. What they want is to establish a regime with an unelected Islamic leader, something like a caliph, who has absolute, unchallenged authority.”

On the other hand, although many of the protestors — including Mousavi and Rafanjani, the wily wheeler-dealer — have impeccable establishment credentials, it’s increasingly clear that most if not all of the opposition leaders want a fundamental change in the way Iran is organized.

That, highly informed Iranian sources say, would include replacing Khamenei with a council of leaders, radically reinterpreting the Constitutional requirement for a Leader, or rahbar, who represents the velayat-e faqih principle (“rule of the jurisprudent”) with a far more flexible, collegial body. Were this to happen, it wouldn’t mean the fall of the Islamic Republic, but it would represent a huge step toward eliminating its worst features.

Many supporters of the opposition — as I learned during nearly two weeks in Iran — don’t want the clergy to rule at all. “The mullahs are like idols,” one government official told me. “They must be broken.”

Rafsanjani is a two-term president (1989-1997), an extremely well-connected, wealthy power broker, and chairman of the Expediency Council. Back in the 1980s, he helped to elevate Khamenei, who was president of Iran from 1981 to 1989, to the post of Leader — succeeding Ayatollah Ruhollah Khomeini, the founder — in exchange for Khamenei’s support for Rafsanjani becoming president. Since then he’s shuttled back and forth between the hardline camp and the reformist camp, while maintaining a pragmatic (opportunist) stance. Now it seems he’s irrevocably thrown his lot in with the reformists, including Mousavi and former President Khatami. And it’s Rafsanjani who, if he chose to, might be able to manipulate the levers of power in Iran to oust Khamenei as Leader.

So far, it’s still unlikely. The ruling clique has the army, the Guard, the intelligence service, and courts, the police, the media, and its street thugs to support them — and, according to some reports, Rafsanjani is under house arrest. But the opposition has the streets.