Shares sheltered from the strong pound especially retailers and banks fared particularly well

Shares sheltered from the strong pound, especially retailers and banks, fared particularly well.A strong performance across the Atlantic boosted both the pound and shares. The FTSE 100 index gained more than 31 points to close at 4,799 yesterday, with BT taking about 15 points off the index. The pound broke the DM3 barrier yesterday afternoon, in the aftermath of the Bank of England's decision this week to increase interest rates for the third time in three months. It was the highest level sterling has attained for more than six years.

While it eventually ended a whisker under DM3 yesterday, analysts were predicting the prospect of further interest rate rises would send it much higher next week. Sterling's index against a basket of other currencies climbed by 1.1 points to 104.9.The buoyant mood spread to the stock market, dampened only by a sharp 7.7 per cent fall in BT's share price. Was it not he who said that wherever oppressionexisted in the world, Iran would be fighting against it? Was it not he who said that "we are men of warand we shall export our revolution to the entire world - until the cry of 'Allahu Akbar' reigns over theworld, the struggle shall continue?" Ten years after the old man's death, the West might pause to ask itself if there is still oppression andbetrayal in the Middle East and to reflect upon the revolutionary forces that could still be stirred by itsbarbarity.. Khatami, if he is notbetrayed by his internal opponents - or destroyed by the Americans who claimed they wanted to be hisfriends - may yet turn Iran into one of the great peacemakers of the Middle East. A laughable idea? What about the new missiles Iran is constructing? Or the reports of chemical warfarepreparations? Or the old torturers still at large? Well, how many other Middle East countries - Israel as well as the Arab nations - can claim to have nolong-range missiles, no chemical warfare capability, no cruel old men in retirement? The tomb of Ayatollah Khomeini is now a Shia shrine of epic proportions, lit up so brightly that airlinepilots can see its golden lights from 50 miles away. Only weeks after President Khatami was elected, a convicted Afghan rapist- his crimes were, of course, truly terrible - was publicly hanged from a crane, his corpse suspended300ft above a crowd. This is not the future of Iran, merely a reminder of the harshness of its revolution. Even as Tehran was preparing its jazz bands and religious ceremonies tocommemorate the revolution, an old Iranian woman was sentenced to amputation and then hanging for themurder of two young women. Hasthe memory of the 1979 siege of the US embassy and the long months of imprisonment for its diplomatsinfected the Americans as deeply as the cruelty of the Shah neutered the compassion of the Iranians? Alas, the brutality still exists.

The Islamic Republic still has a Khomeini-inspired Supreme Leader -Ayatollah Ali Khamanei - and it still has its enemies. Khatami's brave attempt to open a dialogue with the United States was rebuffed by an administrationwhose Middle East policies are virtually identical with Israel's.Only this week, Martin Indyk, the formerhead of the most powerful Israeli lobby group in America and now US Under-Secretary of State, wasasking for Arab support for the old, discredited policy of dual - ie.Iraqi and Iranian - "containment". Perhaps 8,000 died, somesay many more. In the new Iranian era, it is sometimes difficult - in the streets of Tehran or talking to the liberal,intelligent, bright young men now running part of the government - to imagine what cruelty was acted outin the Islamic Republic's name. And with a president as admired as Mohamed Khatami - democratically elected and more popular amonghis people than Israel's elected leaders - it seems almost churlish to remember the brutality of what wentbefore. But Iran's intransigent clerics are still there, as loyal to their dead Imam as the boys who drove to theirdeath through the minefields. Young Iranian men andwomen, interrogated and lashed, many of them having already served their time in jail, were herded intocourtyards for mass executions, hanged like thrushes on groaning scaffolds. That wouldbe asking too much; besides, without the Iraqi invasion, the ferocious anger of the Iranian revolution mayhave cooled earlier. In the event, Khomeini - these are his words - "ate poison" when faced with the collapse of his westernfront in 1988 In revenge, the regime turned on its imprisoned opponents.

And when they've called for our support in bombing Iraq, not once have ourWestern leaders mentioned those tens of thousands of Iranian victims of Saddam's butchery. I told the judge, privately, that I regarded mercy as the greatest of virtues. Iwas wasting my time. There were no velvet gloves in the Iranian revolution. And after Saddam sent his legions across thefrontier, I found myself in a troop train travelling north from the battlefields of Ahwaz, its dyingpassengers coughing the mustard gas out of their lungs into white bandages. At the battle of the Fish Lake, young men took off their helmets to show their fearlessness amid theshellfire, the corpses of their Iraqi enemies piled around them, the shells hissing into the Somme-likemud.