Another book I have just finished and which I highly recommend is Hooman Majd's The Ayatollah Begs to Differ: The Paradox of Modern Iran. Majd, now an American, was born in Iran, the son of an Iranian diplomat (under the Shah) and grandson of a prominent Iranian Ayatollah. As the witty title suggests, this is an easy book to read, but very insightful about the Iranian character and culture. I found his discussion of President Ahmadinejad's style, background, and political image (within Iran) especially enlightening.
His book makes it clear that we (the American press and political system) often misread or misunderstand the subtle messages from the Iranian leaders, because we don't understand the cultural background from which they emerge. And, no doubt, they misread us just as often, which is surely a recipe for eventual disaster.