Observers of Iranian politics should have plenty to do these days. Some might be following the latest news on two fronts. The 1994 Buenos Aires bombing has returned to the spotlight, with the formation of a joint investigation committee between Iran and Argentina, and there is always Iran’s nuclear program, along with the latest developments on that issue.

But one should focus on domestic developments, in line with the old expression, “all politics is local.”

Inside Iran, there are two significant domestic factors to watch. One is the deteriorating economy due to international sanctions, and the possible consequences of these constraints for the Iranian authorities. The second is the 2013 presidential election in June, and recent days have seen a few domestic developments hinting at the unofficial kickoff of this campaign.

Parliament Speaker Ali Larjani was prevented Sunday from delivering a public address in the city of Qom, where protesters chanted against him and used shoes to make their point. President Mahmoud Ahmadinejad had earlier accused Larjani of abusing his authority as speaker in what observers interpreted as part of the power struggle under way over the upcoming elections.

Monday, two daughters of prominent opposition figure Mir Hossein Mousavi were arrested then released, and one may easily ask about the timing of such moves.

On the one hand, tension between the president and the supreme leader of Iran, Ayatollah Ali Khamenei, is nothing new. It has surfaced in the past, as everyone knows, just as Khamenei has generally maintained firm control throughout Ahmadinejad’s two-term tenure.

The atmosphere in Iran these days is one of escalation in the run-up to the polls, as several different factions are positioning themselves for battle. The leading factions are led by Khamenei and Ahmadinejad, who would each like to ensure a victory by his candidate.

Iran’s politics is worth watching closely for this reason, as each faction tries to strengthen its position, and possibly forge alliances with other, smaller groups. Meanwhile, the entire campaign is unfolding in the shadow of the disastrous 2009 round, which led to civil strife and the emergence of the Green movement represented by Mousavi and other figures.

The other factor to consider is that someone in Iran, under the economic pressure of sanctions and the political pressure of the elections, might seek to divert attention from its tense domestic scene.

This could appear in dramatic fashion on the nuclear issue, as Tehran embraces a new conciliatory – or hard-line – stance in the negotiation saga. It could also emerge on the regional scene, with Iran deciding to act more forcefully in one of the half-dozen places where it follows a policy of direct intervention.

As Iran approaches its presidential election test after the experience of 2009, it’s time to pay close attention to the contest, as well as the repercussions that might appear both inside and outside the country.