Hyperinflation, Deadly Unrest, Shadow Of Israel War: What's Happening In Iran

At least seven people were killed in Iran after clashes between protesters and security forces spread to multiple cities, including the Islamic Republic's rural provinces, amid widespread demonstrations over worsening economic conditions, falling currency and rising cost of living.

This marks the biggest protests to hit Iran in three years, since the death of 22-year-old Mahsa Amini in police custody that resulted in nationwide demonstrations in 2022, The Associated Press reported.

The latest deaths could mark the beginning of a heavier-handed response by Iran’s theocracy over the ongoing protests that have slowed in Tehran, but spread elsewhere. Among the fatalities, two were reported on Wednesday (Dec. 31) and five on Thursday (Jan. 1). These occurred in four cities, largely inhabited by Iran’s Lur ethnic group.

According to Reuters, the unrest began after shopkeepers and traders started protesting against the Iranian government's handling of a sharp currency slide and rapidly rising prices on Sunday, Dec. 28.

While Iran's clerical rulers grapple with Western sanctions, the country's economy is reeling from more than 40% inflation.

Last year, the Iranian rial lost nearly half its value against the US dollar, while inflation officially reached 42.5% in December, as per Reuters. In June 2025, Israeli and US airstrikes targeted Iran's nuclear and ballistic missile infrastructure and military leadership.

The country's economy has continued to struggle over the past several years, especially due to US and Western sanctions over its nuclear programme.

There have been demonstrations by merchants, shop owners and students from Iranian universities over the past few days. On Wednesday, the Iranian government shut major cities by announcing a holiday due to cold weather.

The intensity of the violence is said to have been witnessed in Azna, a city in Lorestan province, roughly 300 kilometres southwest of Tehran. Several photographs and videos show objects in the street ablaze, and gunfire echoing as locals shout: “Shameless! Shameless!”

At least three protesters were killed, and 17 others were injured in an attack on a police station in Lorestan, the semi-official Fars news agency reported. Rioters entered the police station around 6 p.m. (local time) on Thursday and clashed with police forces.

Fars and rights group Hengaw had earlier reported deaths in Lordegan, a city in Chaharmahal and Bakhtiari Province. Authorities have confirmed a death in the western city of Kuhdasht, while Hengaw reported another death in Isfahan province.

In Kuhdasht, the Revolutionary Guards said that a member of its Basij volunteer paramilitary unit was killed and another 13 people suffered injuries. It blamed the protesters and accused them of taking advantage.

A protestor, named by the Guards as Amirhossam Khodayari Fard, was killed by the security forces, said Hengaw, which also reported a person being shot dead on Wednesday in Isfahan province.

Amid the worsening conditions, Tehran has responded with an offer of dialogue along with its security response.

Authorities are expected to hold a direct dialogue with representatives of trade unions and merchants, government spokesperson Fatemeh Mohajerani said, without providing further details.

Meanwhile, security forces continue to remain deployed across multiple cities. This includes the Basij, which is loyal to Supreme Leader Ayatollah Ali Khamenei and affiliated with the Islamic Revolutionary Guards Corps.

The Guards earlier slammed people involved in the unrest in Kuhdasht for “taking advantage of the atmosphere of popular protests.”