Correction: An earlier version of this story omitted the first name of the Iranian leader toppled in 1979. He was Mohammad Reza Pahlavi.
TEHRAN — Iran is about to step into a critical period, facing colliding challenges that are among the most significant since the country became an Islamic republic in 1979.
Since mid-March, most Iranians have been on vacation connected to Nowruz, the Persian New Year, leaving Iran’s chaotic capital unusually calm. All that will change on Saturday, when workers return to their jobs amid economic and political concerns.
With negotiations underway over Iran’s nuclear program, and with the start of an extraordinarily unpredictable Iranian presidential campaign, the weeks ahead could prove pivotal in determining whether Iran moves toward an easing in tensions with the West or further isolation.
Much will depend on who wins the June 14 presidential election, which will end Mahmoud Ahmadinejad’s controversial tenure as chief executive. Any nuclear deal would be unlikely until after Iran has chosen its next president.
Although official campaigning will not begin until early May, there are 20 candidates who have announced their intentions to run, and all indications are that the election season will be a volatile one.
Besides a growing list of conservative political figures, possible candidates include two former presidents, Ali Akbar Hashemi Rafsanjani and Mohammad Khatami, both of whom are considered to be reformists within the clerical establishment. Like Ahmadinejad, both are viewed with suspicion by clerics who see them as a threat to their continued dominance in politics.
Although Khatami is the most recognizable member of the reformist camp, some analysts believe he is unlikely to expose himself to the risks of a political campaign after a disappointing end to his two-term presidency, which ended in 2005.
Ahmadinejad, meanwhile, is acting like a man who intends to maintain a strong role in Iranian politics even after he leaves office, lobbying hard for his top adviser, former chief of staff Esfandiar Rahim Mashaei, to succeed him.
It is unclear whether the 12-member Guardian Council, a conservative-dominated body that is tasked with vetting presidential candidates, would allow a reformist, or even Mashaei, to run. The presidencies of Rafsanjani and Khatami both saw Iran move away from the anti-Western ideology that had been central to Iran’s identity since the toppling of Shah Mohammad Reza Pahlavi in 1979.
But the prospect of a wider field of candidates has enlivened a race that most observers had thought would include only conservatives closely aligned with Iran’s supreme leader, Ayatollah Ali Khamenei.
“What seems to be happening in the run-up to the elections is the shifting of alliances and enmities on an immense scale between a wide range of the political elite — far wider than was predicted by Western analysts even three months ago,” said Kevan Harris, a Princeton University sociologist who conducts research on Iran’s economy and travels regularly to the country.
Whoever wins will inherit a series of challenges and opportunities that no previous Iranian president has faced.
On Monday, the Iranian government released monthly economic statistics that showed the official rate of inflation rising for the sixth consecutive month, to 31.5 percent. Some analysts believe the rate to be even higher.
Leading up to the New Year’s holiday, Iran’s central bank made one-time deposits of about $20 each into the accounts of more than 70 million Iranian citizens to help cover holiday expenses. The amount was nearly double the normal monthly cash handout that the state has been paying to citizens to offset a reduction in long-standing utility subsidies.
While there were not many who rejected the cash infusion, concerns that such freewheeling spending policies will actually increase inflation are growing among residents who already are restless over rising prices and their diminished purchasing power.
“I’m not an economist,” said Nazila, a 53-year old housewife in Tehran, “but what difference does this money make if the prices of food just keep going higher?” Like most Iranians who give interviews, she declined to give her last name, fearing government reprisal for speaking to foreign media.
A main reason for the price hikes is the sagging value of the Iranian rial against foreign currencies, a problem compounded by Tehran’s heavy reliance on imports. The decline is also a product of the international sanctions imposed on Iran over the country’s nuclear program.
A new round of nuclear negotiations between Iran and world powers began Friday on a discordant note in Kazakhstan, as Western officials criticized the Islamic republic for failing to respond substantively to demands that it scale back its nuclear ambitions.
In annual messages directed at the Iranian people, President Obama and Iran’s Khamenei expressed a willingness for more direct engagement between the two capitals, although Khamenei was less enthusiastic than Obama. “I am not optimistic about talks with the U.S., but I’m not opposed to them, either,” Khamenei said.
The spokesman for Iran’s Foreign Ministry, Ramin Mehmanparast, said on Wednesday, “The upcoming talks are likely to be conducted in a reasonable atmosphere which would help both sides reach a final solution.”
Joby Warrick in Washington contributed to this report.