FACTBOX-Key political risks to watch in Iran

DUBAI, June 1 (Reuters) - Iran's nuclear dispute with the West and a plan to slash food and fuel subsidies will further test the nerve and authority of hardline leaders who dealt sternly with unrest after last year's disputed election.

The Islamic Republic seems as determined as ever to press ahead with its atomic activities despite economic pain caused by a U.S.-led drive to isolate the major oil producer, including measures targeting the powerful Revolutionary Guards.

President Mahmoud Ahmadinejad's government may have largely re-asserted political control at home with a crackdown on the opposition which challenged his 2009 re-election in the streets.

But its plan to push through cuts in an annual subsidy bill of up to $100 billion may spark renewed public anger.

The Oil Ministry faces the tough task of raising the $25 billion it says the energy sector needs in new investment each year to prevent crude exports from drying up. Falling international oil prices could undermine economic growth.

Below is an outline of the main political risks for Iran:

SANCTIONS HARMING IRAN

Despite Iran's last-minute bid to avert a fourth round of U.N. sanctions by making concessions on a stalled nuclear fuel plan, six major powers have agreed on a draft Security Council resolution that may be voted on in June. [ID:nTOE64H07U]

The United States and its Western allies dropped proposals targeting Iran's energy sector to win backing from China and Russia, but the U.N. resolution could still hurt Tehran and this helps explain why it tried to derail consensus on the text.

It would expand existing U.N. measures by further restricting Iran's banking sector, banning the sale of more types of heavy weapons and calling for international inspection of vessels suspected of carrying cargo related to Iran's nuclear or missile programmes. [ID:nN19206884]

"The resolution is surprisingly strong given months of Chinese and Russian attempts to water it down," said Cliff Kupchan of Eurasia Group.

However, Patrick Clawson at the Washington Institute for Near East Policy suggested it was unlikely to work in persuading Tehran to halt sensitive nuclear activity.

"One would have to be a considerable optimist to believe that the sanctions resolution ... will compel Iran's hardline leaders to change direction on their nuclear intentions."

The West suspects Iran is seeking to develop nuclear arms.

Iran, whose leadership sees the nuclear programme as the country's "inalienable right" and a source of national pride and prestige, says it only aims to generate electricity.

In addition to the planned U.N. measures, U.S. lawmakers are working on legislation to penalise fuel suppliers to Iran to add to pressure on the country. [ID:nN25139842]

A growing number of international firms have already stopped or scaled down doing business with Iran. [ID:nN12203147]

WHAT TO WATCH:

-- Signs of U.N. Security Council splits on sanctions

-- Iranian response to new punitive steps

GUARDS FEEL THE HEAT?

The draft U.N. resolution names for the first time the Guards as linked to Iran's nuclear and missile programmes.

It urges states to be wary of dealing with the force and says some members and firms it controls will be added to lists of individuals and firms facing asset freezes and travel bans.

Branded a proliferator of weapons of mass destruction by Washington, the Guards' influence appears to have increased since Ahmadinejad came to power in 2005, helping to quell last year's huge opposition protests.

Its economic role is also on the rise, with ties to firms controlling billions of dollars in business, construction, finance and commerce, the U.S. Treasury has said.

This could make it potentially vulnerable to any effective international moves aimed at its business dealings abroad.

The force has a "pretty good network" of companies in the Gulf and elsewhere believed to be set up to buy components for Iran's missile systems and other military purposes, said London- based defence analyst Paul Beaver.

"If you can neutralise the Revolutionary Guards economically the regime will wobble," Beaver said. There was no sign of this happening yet, but the proposed U.N. steps would have an impact on the force and its trade transactions, he added.

But Nicole Stracke of the Gulf Research Center in Dubai said the Guards had prepared itself for possible strong sanctions.

"It is difficult for the (Western) intelligence services to track down the full activities of the Revolutionary Guards' interests inside and outside Iran," she said.

Measures targeting financial transactions are hard to enforce and may be easy to circumvent, argued Ian Anthony at the Stockholm International Peace Research Institute (SIPRI).

"The banks will know their own customers, but how to scrutinize the party on the other end of the transaction effectively? It is unlikely to be Iranian Bombmaker Ltd."

What to watch:

-- Guards reaction to U.N. sanctions

-- Further signs of its growing economic role in Iran