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Editor’s Note: The following report is excerpted from Joseph Farah’s G2 Bulletin, the premium online newsletter published by the founder of WND. Subscriptions are $99 a year or, for monthly trials, just $9.95 per month for credit card users, and provide instant access for the complete reports.

WASHINGTON – With Iranian Supreme Leader Ayatollah Ali Khameini looking over his shoulder, newly elected moderate cleric Hassan Rouhani will need to continue somewhat of a hard line against the United States and those Western countries that have imposed sanctions on the nation, according to a report in Joseph Farah’s G2 Bulletin.

Given his moderate approach, however, Rouhani is expected to be in a position to lessen the prospect for public unrest, even though he will have to deal with the issues facing the country that have prompted international sanctions.

He is expected to continue backing the regime of Syrian President Bashar al-Assad, push the country’s nuclear development program that has prompted those sanctions, deal with a weak domestic economy and handle the Gulf Arab countries that oppose Iran’s influence in the region.

Despite being what sources say is a well-connected member of Iran’s clerical elite, Rouhani is known to be sympathetic to the domestic on-again, off-again reform movement and wants to have a less confrontational relationship with the West.

His presence is seen as being more accommodating to Khameini, rather than being confrontational as outgoing President Mahmoud Ahmadinejad was. He sought to expand the powers of the presidency but Rouhani is expected to be far less publicly confrontational with the Iranian supreme leader.

Within the constraints that Khamenei will allow, Rouhani will push for more economic liberalization and growth. He also will push for less direct involvement of the military and clergy in economic matters due to possible corruption.

However, the military, especially the Iranian Republican Guard Corps, has extensive influence in businesses throughout the Iranian economy.

Because Rouhani himself is a member of the clerics in Iran, he will tend to support them more than yield to pressure from the Iranian military that wants to be more involved in politics.

“Despite neutralizing the threat of reformist unrest and creating an opportunity for a détente among Iran’s clerics, Rouhani’s administration will still face some daunting challenges,” according to a report from the open intelligence group Stratfor.

“The Syrian conflict and its involvement of Shiite fighters from both Lebanese Hezbollah and Iraq has created tremendous risk for the Iranian sphere of influence developed after the U.S.-led invasion of Iraq,” the report said.

The report pointed out that Iran’s “defensive arc” of sectarian allies reaching to the Eastern Mediterranean is beginning to come apart.

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