The Arab-Israeli dispute also provoked an international oil crisis. In 1960, a number of oil-producing states formed the Organization of Petroleum Exporting Countries (OPEC) to gain control over oil prices, but the organization was not recognized by the foreign oil companies. In the 1970s, a group of Arab oil states established the Organization of Arab Petroleum Exporting Countries (OAPEC) to use as a weapon to force Western governments to abandon pro-Israeli policies. During the 1973 Yom Kippur War, some OPEC nations announced significant increases in the price of oil to foreign countries. The price hikes were accompanied by an apparent oil shortage and created serious economic problems in the United States and Europe as well as in the Third World. They also proved to be a boon to oil-exporting countries, such as Libya, now under the leadership of the militantly anti- Western Colonel Muammar Qadhafi (b. 1942). One of the key oil-exporting countries was Iran. Under the leadership of Shah Mohammad Reza Pahlavi (1919–1980), who had taken over from his father in 1941, Iran had become one of the richest countries in the Middle East. Although relations with the West had occasionally been fragile (especially after Prime Minister Mossadeq had briefly attempted to nationalize the oil industry in 1951), during the next twenty years, Iran became a prime ally of the United States in the Middle East. With encouragement from the United States, which hoped that Iran could become a force for stability in the Persian Gulf, the shah attempted to carry through a series of social and economic reforms to transform the country into the most advanced in the region. Statistical evidence suggests that his efforts were succeeding. Per capita income increased dramatically, literacy rates improved, a modern communications infrastructure took shape, and an affluent middle class emerged in the capital of Tehran. Under the surface, however, trouble was brewing. Despite an ambitious land reform pro- gram, many peasants were still landless, unemployment among intellectuals was dangerously high, and the urban middle class was squeezed by high inflation. Housing costs had skyrocketed, provoked in part by the massive influx of foreigners attracted by oil money. Some of the unrest took the form of religious discontent as millions of devout Muslims looked with distaste at a new Iranian civilization based on greed, sexual license, and material accumulation. Conservative ulama opposed rampant government corruption, the ostentation of the shah’s court, and the extension of voting rights to women. Some opposition elements took to terrorism against wealthy Iranians or foreign residents in an attempt to provoke social and political disorder. In response, the shah’s U.S.-trained security police, the Savak, imprisoned and sometimes tortured thousands of dissidents. Leading the opposition was Ayatollah Ruholla Khomeini (1900 –1989), an austere Shi’ite cleric who had been exiled to Iraq and then to France because of his outspoken opposition to the shah’s regime. From Paris, Khomeini continued his attacks in print, on television, and in radio broadcasts. By the late 1970s, large numbers of Iranians began to respond to Khomeini’s diatribes against the “satanic regime,” and demonstrations by his supporters were repressed with ferocity by the police. But workers’ strikes (some of them in the oil fields, which reduced government revenue) grew in intensity. In January 1979, the shah appointed a moderate, Shapur Bakhtiar, as prime minister and then left the country for medical treatment. Bakhtiar attempted to conciliate the rising opposition and permitted Khomeini to return to Iran, where he demanded the government’s resignation. With rising public unrest and incipient revolt within the army, the government collapsed and was replaced by a hastily formed Islamic republic. The new government, which was dominated by Shi’ite ulama under the guidance of Ayatollah Khomeini, immediately began to introduce traditional Islamic law. A new reign of terror ensued as supporters of the shah were rounded up and executed. Though much of the outside world focused on the U.S. embassy in Tehran, where militants held a number of foreign hostages, the Iranian Revolution involved much more. In the eyes of the ayatollah and his followers, the United States was “the great Satan,” the powerful protector of Israel, and the enemy of Muslim peoples everywhere. Furthermore, it was responsible for the corruption of Iranian society under the shah. Now Khomeini demanded that the shah be returned to Iran for trial and that the United States apologize for its acts against the Iranian people. In response, the Carter administration stopped buying Iranian oil and froze Iranian assets in the United States. The effects of the disturbances in Iran quickly spread beyond its borders. Sunni militants briefly seized the holy places in Mecca and began to appeal to their brothers to launch similar revolutions in Islamic countries around the world, including far-off Malaysia and Indonesia. At the same time, ethnic unrest emerged among the Kurdish minorities along the border. In July 1980, the shah died of cancer in Cairo. With economic conditions in Iran rapidly deteriorating, the Islamic revolutionary government finally agreed to free the hostages in return for the release of Iranian assets in the United States. During the next few years, the intensity of the Iranian Revolution moderated slightly, as the government displayed a modest tolerance for a loosening of clerical control over freedom of expression and social activities. But rising criticism of rampant official corruption and a high rate of inflation sparked a new wave of government repression in the mid-1990s; newspapers were censored, the universities were purged of disloyal or “un- Islamic” elements, and religious militants raided private homes in search of blasphemous activities. In 1997, the moderate Islamic cleric Mohammad Khatemi was elected president of Iran. Khatemi, whose surprising victory reflected a growing desire among many Iranians for a more pluralistic society open to the outside world, signaled the tantalizing possibility that Iran might wish to improve relations with the United States. During the next few years, press censorship was relaxed, leading to the emergence of several reformist newspapers and magazines, and restrictions on women’s activities were relaxed. But the new president faced severe pressures from conservative elements to maintain the purity of Islamic laws, and in April 2000, several reformist publications were ordered to close by the judiciary for having printed materials that “disparaged Islam.” Although student protests erupted into the streets in 2003, hard-liners continued to reject proposals to expand civil rights and limit the power of the clerics.