Relations continued to deteriorate over the next several months, reaching their apex when President Jimmy Carter allowed the Shah into the U.S. for cancer treatment in October 1979. Khomeini was convinced this was evidence of the U.S. plotting to restore its influence in Tehran, and his rhetoric against the “Great Satan” escalated. On November 1, Bazargan traveled to Algeria to represent Iran at a celebration of Algeria’s independence. While there, he met with U.S. National Security Advisor Zbigniew Brzezinski and was photographed shaking his hand. Iranian radicals of all stripes, led by the Islamic Republican Party, seized on the image to castigate Bazargan for being in league with the Americans.
On November 4, 1979, roughly 500 radical students calling themselves “Students Following the Line of the Imam,” led by an IRP official, stormed the U.S. Embassy compound, occupied the building and grounds, and took 90 hostages. After freeing women and black Marine Guards, the radical students held 52 hostages for 444 days. Khomeini backed the students, labeling the U.S. Embassy a “den of spies” and accusing the diplomatic personnel stationed there of being CIA agents plotting to overthrow the revolutionary government. He proclaimed the hostage crisis a “second Iranian Revolution,” as it cemented Iran’s anti-American trajectory, and he believed it united Iranians and strengthened his hand. Whereas Iran had previously been subjugated by the U.S., Khomeini’s revolutionaries faced off directly against U.S. might and the West, which did not have an answer to the hostage crisis. Khomeini boasted, “The Americans can’t do a damn thing. …The whole world is watching. Can America stand up to the world and intervene here? America would not dare.”
The embarrassment had immediate and dramatic effects on revolutionary Iran’s relations with the U.S. All diplomatic ties were severed, the U.S. ceased oil imports from Iran, instituted a trade embargo, and stopped fulfilling arms agreements inked under the Shah. The takeover would likely have been short-lived without Khomeini’s support. Khomeini saw in the crisis an opportunity to weaken Bazargan’s liberal government, further radicalize the Iranian citizenry against the U.S., and consolidate power. From this point forward, he acted far more assertively domestically and on the world stage, as he was now a potent Islamic and international symbol of resistance to U.S. imperialism.
After attempting to persuade Khomeini to release the hostages and realizing he was powerless, Bazargan and his provisional government resigned. This represented a significant political setback for Iran’s secular, liberal, and well-educated middle-class constituencies and ensured that revolution would triumph over gradual reform. Following Bazargan’s resignation, Khomeini greenlit his clerical followers, who were not yet confident in their ability to manage the executive affairs of the country, to take over the administration. He immediately called for the constitutional referendum to be held and for preparations to be made for presidential and parliamentary elections.
The hostage crisis effectively stifled debate over Iran’s Constitution, as any opposition was now deemed treacherous. The IRGC further suppressed whatever pockets of resistance to velayat-e faqih existed, most notably in Iran’s restive Azerbaijani provinces where opposition was most fierce. On December 2 and 3, Iran held its referendum, and the constitution enshrining Khomeini as Supreme Leader was passed, with 99.5 percent voting affirmatively. Fewer Iranians voted on the constitutional referendum than the earlier referendum on the favorability of establishing an Islamic Republic, as many liberal and secularist opposition parties, civil society associations, and Kurdish and Azerbaijani citizens opted to boycott the vote.
Khomeini himself was not fully satisfied with the finalized constitution, as it retained clear Western influences in referring to human rights and allowing elections for republican institutions. Still, given the discontent in many quarters, particularly among more modern Iranians who were loath to give up the social freedoms enjoyed under the Shah fully, Khomeini decided that the constitution was sufficient for the time being. While allowing the populace to vote contradicted the notion of divine rule, Khomeini still had veto power over all major decisions and appointments. Still, the constitution created an inherent tension between the Iranian regime’s theocratic and republican elements – a tension reflected at the societal level in the competing visions for repressive, clerical rule and the liberal, democratic aspirations of the Iranian populace – that has continued to play out across Iran’s politics to the present day.