Iran Timeline, Part 18: 1988–1997: KHOMEINI, RAFSANJANI, HEZBOLLAH & HAMAS

From Ceasefire to Proxy Power — Reconstruction, Continuity, and the Birth of the Network

By Sasha Alex Lessin, Ph.D. (Anthropology, UCLA)

INTRODUCTION: THE WAR ENDED, BUT THE SYSTEM DIDN’T

In August 1988, Iran accepted a ceasefire with Iraq.

The war that had consumed nearly a decade ended not in triumph, but in exhaustion. Yet the Islamic Republic did not collapse under the strain; it adapted. The trenches closed—but the structure of power that the war had built–the Revolutionary Guards, the ideological state, programmed with Anunnaki domination consciousness and a leadership convinced that survival required constant vigilance and external pressure, remained intact. Within a year, the system’s founding figure would be gone, but the system would be hardened.

1988–1989: CEASEFIRE, EXHAUSTION, AND KHOMEINI’S DEATH

Iran emerged from the war militarized but battered.  It had lost hundreds of thousands of Iranians killed.  Its infrastructure was damaged and its economy strained. Iran had become a militarized society. Iran’s leadership realized that another war, like Iran’s war with Iraq, could destroy them. In June 1989, Ruhollah Khomeini died.

Yet instead of fragmentation, the system executed a controlled transition. After the death of Ruhollah Khomeini, Iran underwent a rapid but carefully managed power transition in which Ali Khamenei was elevated by the Assembly of Experts—largely with the backing and political maneuvering of Akbar Hashemi Rafsanjani—to become Supreme Leader, while Rafsanjani himself assumed the presidency, creating a dual structure where Khamenei held ultimate ideological authority and Rafsanjani directed post-war reconstruction and pragmatic governance based on strict islamic doctrine and domination. Rafsanjani and Ali Kahmeinei accepted the Revolutionary Guard (IRGC) as a parallel power center and decided that Iran must never again fight alone or conventionally if avoidable, and determined, We endured. We will not risk annihilation again—but we will never be defenseless. The Iranian populace concentrated on rebuilding the country’s infrastructure, rather than converting the Middle East’s majority Sunnis to the Iranian Shi’a sect as Kahmeinei promoted. (The Sunni–Shiʿa divide began in 632 CE after the death of Muhammad, when the community split over who should lead—those who supported the elected caliphate of Abu Bakr (Sunni) versus those who believed leadership rightfully belonged to Ali ibn Abi Talib and his descendants (Shiʿa).

1989–1997: RAFSANJANI — RECONSTRUCTION WITHOUT SURRENDER

Rafsanjani’s presidency marked a shift in tone—but not in underlying strategy. He rebuilt roads and reconstructed an infrastructure that integrated the country again.

Rafsanjani sought to recover from the devastation of the Iraq war without becoming dependent on support from the U.S. and Britain. He fostered the expansion of industry and oil production and the gradual economic reopening, but maintained ties with militant movements abroad to expand Iran’s covert influence in areas of Saudi and Sunni control.

THE REVOLUTIONARY GUARD
Under Rafsanjani and Ali Khamenei, during this period, the Guard deepened its institutional power, expanded its role in the economy, and its external operations arm (later known as the Quds Force) to spread Iran’s influence and enforce the religious revolution and create strategic influence for Iran.  The Guard’s strategy was to increase Iran’s strategic security without creating danger to Iran itself.

The 1990s: FROM STATE WARFARE TO NETWORK WARFARE WITH HEZBOLLAH: IRAN’S MODEL AVATAR

Instead of tanks, trenches, and mass casualties, Iran built alliances. proxy forces, ideological partners, and a network to harass Sunni-dominated countries. Hezbollah had emerged in the 1980s But in the 1990s, mature into a military force that could harrass modern polities abroad, function as a political party, and social service network for Iran as well as an ostensibly non-state actor could keep pressure on Israel without direct Iran–Israel war, extend Iranian influence into the Lebanon and inhibit Iran’s enemies without triggering an attack on Iran itself.

HAMAS AROSE IN PALESTINE, THE WEST BANK OF AND REJECTED THE OSLO ACCORDS

Hamas had emerged in 1987 as an offshoot of the Muslim Brotherhood, positioning itself as both a resistance movement and a religious-political alternative to the more secular Palestinian leadership. The First Intifada (1987–1993) was a mass Palestinian uprising against Israeli control in Gaza and the West Bank of the River Jordan. The Palestinian populace protested, engaged in civil disobedience, and clashed with Israeli forces. For Iran, the uprising—and especially Hamas’s rise—presented an opportunity to extend its influence into the Palestinian arena: although Hamas is Sunni, Iran supported it as part of a broader strategy of backing anti-Israel resistance groups, allowing Tehran to project power beyond its borders and frame itself as a defender of the Palestinian cause within the wider Islamic world.

THE OSLO ACCORDS

The Oslo Accords, where U.S. President Bill Clinton, Israeli Prime Minister Yitzhak Rabin, and PLO leader Yasser Arafat negotiated arrangements over Palestinian self-rule in the Gaza Strip and the West Bank. The accords said that Israel would gradually transfer authority to a new Palestinian governing body (that became the Palestinian Authority (PA). The Oslo Accords (1993–1995) were a framework for phased Palestinian self-government, not a final territorial split. Under the Accords, Israel would gradually transfer authority to a new Palestinian governing body—the Palestinian Authority (PA)—first in 1994 in the Gaza Strip and Jericho, and then, beginning with the 1995 Oslo II agreement, extending into major population centers of the West Bank of the Jordan River. The Accords Oslo Accords outlined a framework for phased Palestinian self-government, not a final territorial split. Under the Accords, Israel would gradually transfer authority to a new Palestinian governing body (That became the Palestinian Authority (PA) first, as a test case in 1994, for the Gaza strip and then the West Bank of the Jordan River. The Accords were a framework for phased Palestinian self-government, not a final territorial split. Under the Accords, Israel would gradually transfer authority to a new Palestinian governing body—the Palestinian Authority (PA)—first in 1994 in the Gaza Strip and Jericho, and then, beginning with the 1995 Oslo II agreement, extending into major population centers of the West Bank of the Jordan River.”

 Gaza Strip

West Bank

The Accords did NOT create a final Palestinian state, nor did it permanently divide land into two clean regions. Instead, it created a temporary, staged arrangement meant to lead to a final agreement (which never fully materialized). Oslo introduced a cooperator pathway (negotiation, shared governance. The Oslo Accords were to create a phased system of Palestinian self-rule in the Gaza Strip and the West Bank, dividing the latter into zones of varying control rather than establishing a final state.  They opened a negotiation path that some embraced and others violently rejected. Groups like Hamas rejected it and Iran aligned more with the rejectionist / resistance track.

THE EMERGING PATTERN

By the end of the 1990s, a pattern is visible: Iran is no longer primarily a battlefield state. It is becoming a network state with nodes in Lebanon (Hezbollah) and Palestine (where Hamas connections developed). Later this network will expand to Iraq, Syriaand Yemen (Houthis), but the architecture begins here.

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