Oils sales decreased but Mossadeq remained popular. The British persuaded the USA to join them in overthrowing Mossadeq.
-A group of Western oil companies agreed with the Shah to restart production in return for a 40% share in Iran´s oil profit.
-The Shah signed a treaty with the USA and later joined Britain, Turkey and Iraq in an anti-Soviet alliance.
-Iran's income increase with the oil industry and the Shah increase the number of schools and raised literacy rates.
The Shah faced an increasing opposition that it was led by the mullahs. They criticised the Shah's close relations with non-Muslims West. Many said that the Shah's were used to been exploited for American gain and they supported the existance of the state of Israel. As a reply, the Shah's secret police exiled, arrested, imprisoned and tortured thousands of the government's critics, including mullahs.
In 1978, there were huge strikes and demonstration calling the Shah's to abdicate, always in these demonstrations the Shah police killed people and then there were bigger demonstrations. At the end of 1978 some soldiers refused to fire on demonstrators because they sympathise with the protestors. In January the Shah left Iran and he never returned, the Khomeini returned triumph and delared an Islamic Revolution. Most of the Shah's declared support for the revolution.
The USA, the former ally of the Shah was seen as the main enemy in Iran. When the US government allowed the Shah into America to receive medical treatment, Iranian students took as hostages American staff of the embassy. The US declared Iran to be an international "outlaw".
Iran was ruled by Shah and it was an independent country, however some oil fields were controlled by a British company. After the WWII Iranians demanded that they should take control of the oil fields. British refused to allow the Iranians to operate oil fields.
There were several groups competing for power in Iran. There was a Communist Party and middle-class liberals who wnted a Western-style democracy, the Khomeini's supporters organised in the Islamic Republican Party who dominate the Parliament and hold key positions in the government. Khomeini was "supreme leader" of Shiite Iran.
In 1980 Saddam invaded Iran, he did this because Khomeini called on Iraqis to rise up and overthrow Saddam. Saddam had evidence that Iran was involved on the assassination of leading members of the Baathist Party in Iraq, he saw an opportunity to gain valuable territory and Iran was weak.
In July, Iranians accepted a ceasefire, because their economy was in ruins and because they faced the prospect of a direct war with the USA.
Khoemeini died in 1989. Despite eight years of warfare, he was still revered by alot of Iranians for his proud, twelve million people filled the streets of the capital. The Islamic Republic continued to attract wide support in Iran. Despite the fact that Iran suffered a lot of destruction and loss of life yhey continue being a major power, however they didn't succed in exporting its revolutionary Shiite brand of Islam.
In Iraq half a million people died and the remain population suffered from health and education. During the war, Iraq spend most of the money in weapons and after the war they didn't have money to spend in schools and hospitals. After the war the government promised people they will have peace and prosperity, instead they had more terror. Iraq faced debts because the were rebuilding the country and Saddam continued investing money in weapons. By 1990 they got the fourth largest army and more aircraft than France and Britain combined. Saddam had to divert the focus of attention that's way he invaded Kuwait.
On 2 August, a huge force of 300,000 crossed into Kuwait and overran the country. All Arab countries condemned Saddam's action and the UN agreed to impose sanctions to Iraq.
Saddam declared Kuwait a province of Iraq and he tried to win the Arab support. Iraqi troops killed thousands of Kuwaiti protestors and killed hundreds. Saddam ordered the detention of hundreds of foreigners as hostages.
Saddam needded to pay off his debt and the only way to do this was to increase his production of oil. Iraq was a member of the OPEC and the OPEC controlled the oil production to keep prices high, if there was too much production the price dropped, but Kuwait refused Saddam's request.
The King of Saudi Arabia requested the USA for help to send military forces to defend the country in case of attack. The USA built up large naval, land and air forces.
"The First Gulf War" began with air assaults on military targets, airports, bridges, factories and roads. When the ground attack began the Iraqi forces were quickly defeated. Us and coalition were better trained, better equipped and more motivated than Iraqi forces. When the Iraqi forces retreated, they set on fire oil fields in Kuwait.
The solution for Iraq was withdraw from kuwait or face military force. Saddam Hussein predicted the "mother of all battles". 700,000 troops had been assembled to the deserts of Saudi Arabia. The troops were from USA, Britain, France, Egypt, Syria, Pakistan, Bangladesh, etc. In all, 34 countries join the coalition.
A month after the UN started to search for and destroy Iraq's weapons of mass destruction and Iraq co-operated. After a year the UN said that they had destroyed all medium and long range missiles. Three years later, they said they destroyed all the material for making nuclear and chemical weapons.
Saddam didn't want to give up all his secret weapons and had always tried to disrupt the UN weapons inspectros. In Iraq half a million people died for starvation and several states started to trade again with Iraq. The USA accepted the revival of Iraq's oil industry. When a new president was elected in the USA, they started talking about the need of removing Saddam.