rrender, but it
required four years of intermittent negotiations, recurring
hostilities, and UN mediation before the Netherlands agreed to
relinquish its colony. Indonesia is the world's largest archipelagic
state and home to the world's largest Muslim population. Current
issues include: alleviating poverty, preventing terrorism,
consolidating democracy after four decades of authoritarianism,
implementing financial sector reforms, stemming corruption, holding
the military and police accountable for human rights violations, and
controlling avian influenza. In 2005, Indonesia reached a historic
peace agreement with armed separatists in Aceh, which led to
democratic elections in December 2006. Indonesia continues to face a
low intensity separatist movement in Papua.

Iran
Known as Persia until 1935, Iran became an Islamic republic in
1979 after the ruling monarchy was overthrown and the shah was
forced into exile. Conservative clerical forces established a
theocratic system of government with ultimate political authority
vested in a learned religious scholar referred to commonly as the
Supreme Leader who, according to the constitution, is accountable
only to the Assembly of Experts. US-Iranian relations have been
strained since a group of Iranian students seized the US Embassy in
Tehran on 4 November 1979 and held it until 20 January 1981. During
1980-88, Iran fought a bloody, indecisive war with Iraq that
eventually expanded into the Persian Gulf and led to clashes between
US Navy and Iranian military forces between 1987 and 1988. Iran has
been designated a state sponsor of terrorism for its activities in
Lebanon and elsewhere in the world and remains subject to US and UN
economic sanctions and export controls because of its continued
involvement in terrorism and conventional weapons proliferation.
Following the election of reformer Hojjat ol-Eslam Mohammad KHATAMI
as president in 1997 and similarly a reformer Majles (parliament) in
2000, a campaign to foster political reform in response to popular
dissatisfaction was initiated. The movement floundered as
conservative politicians, through the control of unelected
institutions, prevented reform measures from being enacted and
increased repressive measures. Starting with nationwide municipal
elections in 2003 and continuing through Majles elections in 2004,
conservatives reestablished control over I