Elder statesman Hashemi Rafsanjani, a mercurial cleric who has played both sides of the reformist-conservative divide, is rising again as a key challenger to the Iranian president after local elections showed deep discontent with the president's hard line.

Elections for local councils in towns and cities across Iran were seen as a referendum on President Mahmoud Ahmadinejad's 18 months in office, and results so far have yielded widespread victories for his opponents.

Since taking power, Ahmadinejad has escalated Iran's confrontation with the United States and the West, in particular drawing the threat of U.N. sanctions for pushing ahead with uranium enrichment. He has also sparked international outrage for his comments against Israel and casting doubt on the Nazi Holocaust.

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On Wednesday, a newspaper that usually reflects the thinking of many in the conservative clerical leadership said the election results showed it was time for Ahmadinejad to moderate his tone and concentrate on improving the economy.

"The election could be very instructive to those who have been in power," the Jomhuri Eslami editorial said. "Arrogance, disregarding people's economic situation, insulting respected people and high-flying policies were among the elements of the failure of those who could not imagine such a failure."

Ahmadinejad felt the heat during a speech Tuesday, when some in the crowd chanted "unemployment, unemployment, unemployment is a major problem," the pro-government daily Keyhan reported. The president has not commented on Friday's elections.

The election results showed a partial comeback for the reformist movement, which was crushed over the past five years by hard-liners who drove them out of the local councils, parliament and the presidency. The reformers seek closer ties to the West — even the United States — and a loosening of the power of Iran's clerical rulers.

But the big winners were "moderate conservatives," who support the clerical regime but have become disillusioned with Ahmadinejad. Many analysts were predicting a coalition between reformers and moderate conservatives to oppose Ahmadinejad and his hard-line allies in parliament and presidential elections in 2009.

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Talk of a political bloc was fueled after two reformist politicians — former president Mohammad Khatami and Mehdi Karroubi — met Sunday with Rafsanjani, a top moderate conservative.

Rafsanjani's status was boosted in a parallel election Friday picking members of the Assembly of Experts, a body of 86 clerics that oversees Iran's supreme leader and picks his successor.

Rafsanjani won the most votes of any candidate in Tehran for the assembly — half a million more than his closest competitor — a strong show of support for the cleric, who lost to Ahmadinejad in June 2005 presidential elections.

"The people's vote for Rafsanjani meant they hope he will create and improve the moderate line," said Amir Mohebbian, a political analyst and newspaper columnist.

Final results from the local council election in Tehran were expected late Wednesday or Thursday. The Interior Ministry said 250,000 of the 1.9 million votes remained to be tallied, blaming the delay on the large turnout and the simultaneous vote for the Experts Assembly.

But partial results showed Ahmadinejad's allies won only two seats on Tehran's 15-member council, one of them going to his sister, Parvin Ahmadinejad. Conservative moderates were on track to take eight seats and reformers four. The last seat appeared set to go to an independent.

Final results for the rest of the country showed a heavy defeat for Ahmadinejad supporters. None of his candidates won seats on the councils in the cities of Shiraz, Bandar Abbas, Sari, Zanjan and Kerman. Many councils in other cities were divided along similar proportions as Tehran's.

The election does not directly affect Ahmadinejad's power. It chose 113,000 seats on councils that administer city affairs and pick mayors.

It was not clear whether Ahmadinejad will bow to pressure for change. The pro-government Keyhan called the election a victory for Ahmadinejad — depicting all conservatives as his supporters — suggesting some in the hard-line camp do not see it as a call for change.

But many see the vote as a sign of an anti-Ahmadinejad moderate coalition rallying behind Rafsanjani.

The 72-year-old Rafsanjani — who was president from 1989-1997 — has long been an elusive inside player in the clerical leadership. He is mistrusted by reformists because of his closeness to supreme leader Ayatollah Ali Khamenei and by hard-liners for emphasizing pragmatism over ideology.

Rafsanjani has supported the Islamic republic's policy of shunning the United States, yet played a major role in the 1980s Iran-Contra scandal in which the U.S. sold arms to Iran for help in freeing hostages in Lebanon. He rejects a suspension of Iran's uranium enrichment program, but has shown a willingness to compromise.

Pro-reform students have frequently jeered him in the past, and he suffered a humiliating defeat by reformists in 2000 parliamentary elections.

In the 2005 run-off presidential election, Rafsanjani was the more moderate candidate in the race against Ahmadinejad, but pro-reform voters failed to support him.

Khatami's meeting with him Sunday suggested reformers could embrace him.

"People showed in the elections that they don't like hard-line policies," said Mohammad Atrianfar, a leader of the moderate Kargozaran Party. "From now on (Ahmadinejad's) hard-line current will lose its power and it will return to its place."

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