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The Iran of Tomorrow Movement (IOTM), which runs a Los Angeles-based Iranian satellite television station, says it is working to support Iranians' efforts to replace the Islamic Republic with "a democratic, secular, and modern government."

Foroutan called recent developments in the Middle East - elections in Afghanistan and Iran, mass protests and anti-Syria sentiment in Lebanon, and calls for reform in Egypt and elsewhere - "extremely encouraging for Iranians."

While Iraq and Afghanistan still faced "a long road ahead" in achieving full democracy, he said the emergence of democratic governments on either side of Iran was "making the Islamic Republic very nervous as they feel the vise tightening firmly on both sides of their neck."

"More recent events in Lebanon and Egypt are extremely alarming for The Islamic Republic," he added. "They see the American influence as a more widespread occurrence in this region, and no longer limited to Iran's immediate neighboring countries."

Unrest, referendum calls

Foreign Ministry spokesman Hamid-Reza Asefi responded to Bush's latest comments by saying the U.S. should "stop its futile efforts to divide the Iranian people."

Experts say Iran is, however, deeply divided and likely to become more so this year.

The country faces presidential elections next June, but observers see little chance for meaningful change.

All prospective candidates are screened by the Guardians' Council, a 12-member body which ahead of parliamentary elections 13 months ago barred thousands of candidates -- mostly reformists -- from running.

Among the strongest of the likely contenders are cleric and former president Hashemi Rafsanjani and former foreign minister Ali Akbar Velayati. Neither is considered a "reformist."

Reports emerging from the country indicate growing calls for a boycott of the election, with many calling instead for a referendum on the drafting of a new constitution, compatible with international human rights treaties.

A referendum campaign is underway, and according to its website, more than 35,000 Iranians have signed a petition supporting the call.

On Sunday, students at Iran's Isfahan University reportedly upset the visit by a presidential election candidate by singing a pre-Islamic Republic patriotic song that is viewed as a nationalist alternative to the official national anthem.

Students also held up placards denouncing the election and calling for a referendum instead.

The student calls came just days after the publication of an unprecedented open letter signed by more than 500 Iranian politicians, scholars, students and others, condemning the regime's "incompetence."

In the absence of true democratic reform, it said, the next president, like the current one, would be no more than a figurehead for "unelected organs," according to the independent Iran Press Service.

AEI scholar Michael Ledeen wrote in a FrontPage magazine article published Wednesday that the time was right for Secretary of State Condoleezza Rice and others to support the referendum call.

"The Iranian people are clearly ready to vote for their freedom, and nothing would so damage the terror network as the fall of its greatest supporter," he said.

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