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Fariba is having an affair with a married man. They snatch whatever moments they can together, walking hand-in-hand after dusk in Jamshaidieh Park in northern Tehran, hoping no one will

recognise them. The Islamic republic’s official punishment for adultery – stoning to death – is unlikely to apply, because the court requires as proof that four men witness the couple _in

flagrante_. The park is full of unmarried couples talking and walking together, which is also illegal. All over Iran, young women face the same difficulty as Fariba. When I last visited,

four years ago, the reformist president Mohammad Khatami had recently been elected and the first stirrings of social change were visible. Women were pushing their headscarves back to reveal

more hair; lipstick was getting brighter and glossier. President Khatami was re-elected with a big majority in 2000. Now the young women of north Tehran have turned the manteau – the coat

the mullahs insist women must wear to cover themselves – into a fashion statement: cropped well above the knee, and shaped at the waist. Jeans – tight round the thigh, flared at the ankle –

are in. Global communication has made all the difference. Nearly two million Iranians have internet access. Fariba is in regular e-mail contact with friends who have emigrated to Los Angeles

– which has the largest expatriate Iranian population in the world. Others use the net to listen to Radio Azadi – the word means “freedom” – broadcasting from LA, and, according to the

conservative mullahs, poisoning their minds with unIslamic ideas. The day we visited Isfahan, home to Iran’s most exquisite tiled mosques and palaces, marked the birthday of Imam Mehdi, the

12th Imam. Among the crowd who celebrated outdoors, a gang of youths cruised the street eyeing girls who giggled and pretended to look in shop windows. A young man explained the courting

ritual: if a girl likes a guy she slips him her mobile phone number on a tiny piece of paper. He gives her a call and they chat, standing only a few yards apart and looking at each other.

The morals police can beat you with their clubs and whips if they catch you touching, but they can’t get you for talking on the phone. Someone pointed out four leather-jacketed men on

motorbikes surveying the scene. “They’re the vigilantes. They’re the ones who give us trouble.” These are _basiji_, militia believed to be in the pay of the conservative mullahs. They defend

the revolution by whipping girls who wear their headscarves too far back. The leader of Friday prayers in Isfahan, Ayatollah Taheri, well-loved in the city, recently resigned, partly in

protest against the free rein given to the vigilantes. “The ones who are astride the unruly camel of power,” he wrote in an open letter published in a newspaper, “are unfortunately the

assisters and encouragers of a bunch of club-wielders and a gang of shroud-wearers who sharpen the teeth of the crocodile of power and who want to marry the ill-tempered, ugly witch of

violence to religion.” He also railed against unemployment, the gap between rich and poor, and corruption among the powerful. With two-thirds of Iran’s population aged under 30, and an

estimated three-quarters of a million new jobs needed every year, the ayatollah’s letter struck a chord with the young. Yet those who could be opening up the economy are keeping it firmly

shut. For 20 years, Ali Naghi Khamoushi has been president of Iran’s Chamber of Commerce. “Capitalism is like a bird in a cage,” he said, sitting on a plump, white-brocaded chair in his

downtown office. “One shot and it tries to fly away.” He was especially critical of coverage of corruption cases in newspapers that support a reforming agenda. “Not more than ten people are

corrupt in Iran,” he said. Khamoushi speaks for an entrenched economic elite that says it favours opening up markets, but without changing the structure of power. The traders known as

_bazaaris _and the government-subsidised foundations owe their wealth to unelected mullahs who use religion to hold back social, economic and political change. President Khatami has

presented two bills to parliament that would give him more power at the expense of the councils of mullahs that have vetoed many of his and parliament’s reforming projects. This is his last

chance. Popularly elected twice, he has two years before his term runs out, and the law says he cannot run again. He knows that unless he gets the bills passed, the people will despair of

government. _Lindsey Hilsum is _Channel 4 News_ diplomatic correspondent_