Ali Aram rubs his intricately tailored goatee before answering the question.

"Yes, unfortunately, I voted for [President] Khatami," the 21-year-old university student sighs. "He shouldn't have raised our expectations if he couldn't deliver on his promises." Other students clustered around a small table in a Tehran café murmur their assent.

Five years after Mohammad Khatami was propelled to a landslide victory on a platform of liberalizing Iran's Islamic system, the charismatic president is losing his sheen. There is widespread frustration over the pace of his reforms.

Few doubt his decency or sincerity or blame him personally. They know his efforts have been thwarted by an unelected hard-line minority that still controls key institutions such as the courts, the armed forces, and the broadcast media.

But Mr. Khatami's supporters have been urging him to stand up to the old guard. The president has finally thrown down the gauntlet: Last month Khatami presented two bills to the Iranian parliament that would end his opponents' stranglehold on power. Whether the bills are passed or blocked, they are likely to mark a major turning point in Iranian politics.

While Khatami supporters dominate parliament, the legislation must be approved by a conservative-controlled watchdog body. If blocked, Khatami's aides say he could take the country to a referendum to assert his authority – or that he could even resign, a threat he has made in the past. "If he does stand down, it would be a major crisis of legitimacy for the regime," says a European diplomat in Iran.

Many Iranians, including more moderate conservatives, see Khatami as the last, best chance for a religious system that faces grave dangers if it is not reformed. Analysts say secularization is a social movement that could explode if democracy is thwarted. Even some reformist clerics are calling for a separation of mosque and state – a step Khatami does not support.

The largest reformist group in parliament has also threatened to abandon the corridors of power if the bills are blocked. That would leave Khatami's hard-line opponents isolated, more exposed to American hostility, and facing a popular opposition able to work outside the system.

Conversely, if the bills are passed undiluted, Khatami would emerge enhanced to forge his vision of an Islamic democracy. Abroad, he would have the power to pursue détente with the United States. A recent poll showed most Iranians favored talks with the US. But for the hard-line establishment, even suggesting that dialogue with the "global arrogance" should be resumed after a 22-year break is a serious offense.

The first bill is aimed at curbing the role of the Council of Guardians, a powerful, conservative-dominated body that vets candidates for general and presidential elections. It has excluded many aspiring reformist politicians from running for office.

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