Hailing what they call a "New Khatami," reformist operatives – who have been relegated to Iran's political wilderness for years – hope that Mr. Khatami's campaign will erase a reputation for weakness and rekindle the exuberant spirit for change that brought the cleric landslide victories in 1997 and 2001.
But even Khatami's most vocal supporters say it will not be easy taking on President Mahmoud Ahmadinejad and the conservative institutions of the Islamic Republic that are lined up to back him, or another hard-line candidate, despite Iran's struggling economy and its standoff with the West.
The June 12 contest promises to be a critical showdown, pitting the two competing trends that have not only shaped politics in Iran for more than a decade, but also what it means to be a revolutionary state in a modern, globalized age.
The presidential tug of war began two weeks ago, when Khatami's presence at an event marking the 30th anniversary of the Islamic revolution prompted a noisy face-off between rival supporters. This week two websites backing Khatami's campaign were shut down.
"This is the first time in 30 years the people of Iran have two real candidates that have shown what they are made of," says Iraj Jamshidi, news editor of the daily Economic World newspaper in Tehran. "Each has a completely different stance on domestic and foreign policy, and they are both well known."
Both men have yet to be officially accepted as candidates. And Mr. Ahmadinejad has until now left it to aides to confirm whether he will run for a second term, though he has spent much of his presidency in de facto campaign mode, traveling repeatedly across the country, doling out cash, projects, and promises.
Khatami delayed making the decision until he had met several times with Iran's supreme religious leader Ayatollah Sayed Ali Khamenei, who has publicly supported Ahmadinejad's government and apparently advised Khatami against entering the race.
"Almost everyone knows of that last meeting with the Leader – they know the Leader said not to run, but [Khatami] said he will run," says Isa Saharkhiz, a reformist editor and activist. "It shows that Khatami is tougher than before."
The former president told Ayatollah Khamenei he felt an "obligation" to run. When he announced his candidacy, Khatami declared it "our duty to correct the current situation" though nobody could perform a "miracle."
Khatami must overcome the reputation that "he's a good guy, but he is weak," says Mr. Saharkhiz, who has a photograph in his living room of Khatami at the wedding of his son. "The signals Khatami is giving could encourage these people. It is the slogan of reformists, the 'New Khatami.' "
But Iran's political scene has changed dramatically since the Khatami era. Back then the philosopher-president with the black turban promised to restore the rule of law, loosen social restrictions, and open Iran more to the United States and the West after two decades of isolation.
Khatami was blocked at almost every turn by conservatives who accused him and his supporters – anyone that fit under the broad "reformist" umbrella – of trying to destroy Iran's Islamic system.
The result was deep apathy among Khatami's supporters, especially large numbers of young people and women. They stepped away from politics, paving the way for conservatives to retake parliament in 2004, and helping Ahmadinejad win in 2005.
The hard-line Kayhan newspaper compared Khatami to Benazir Bhutto, suggesting in an editorial he might share the same fate as the US-backed former prime minister and Pakistani candidate who was assassinated in late 2007. Kayhan charged that reformists planned to "change the regime and remake its essence."
The daunting challenge for reformists today is spelled out in a British diplomatic cable from Tehran last December, marked "restricted" and obtained by the Monitor.
"To hardliners the reformist is at best a dupe, and at worst a Zionist-American-British spy," the cable reads. When in power, reformists neglected the economy and "lacked, and continue to lack, the networks and organizations the hardliners and conservatives rely on: eg the Basij militia, and the mosques. The reformists' powerbase is small, and focused on middle-class intellectual urbanites, who are very much a minority in Iran."
"The reformists are now disorganized, and rely on one totemic figure: Khatami himself," notes the British cable. "But pessimistic reformists doubt that the hardliners will ever again allow a reformist victory."
Still, reformists are hoping that Khatami can reenergize disillusioned voters. The basiji paramilitary and Revolutionary Guard "have clearly stated their will already, and it's clear they are not for Khatami," says news editor Jamshidi. "While they are powerful, they are not all the power. If 30 [million] to 40 million votes go to Khatami they can't do anything – they have to stand back.
"They can't criticize the situation now, because it is of their own making," says Jamshidi.
From food to rent, prices have shot up, along with inflation and unemployment. "And all this happened at a time when this government has more oil income that at any time in the history of Iran," adds Jamshidi. "This is a big question mark in front of [Ahmadinejad], which will make the election hard."
Those are the issues that Khatami supporters are ready to exploit. "If we stay at home and not vote, the situation in Iran in politics, economics, and even sport will get worse," says Saharkhiz. "It's better to spend one day, one hour in line to vote for Khatami."