To 'watched', you can add 'speculated about', for this darkest of dark horses won his landslide election victory in the world's second-largest oil producer. More pertinent than oil, perhaps, is the fear that Iran is once again a country where all the political power is held in the hands of ultra-conservative Islamists who seem intent on developing nuclear power, maybe even nuclear weapons. No wonder people are asking: who is Mahmoud Ahmadinejad?

Born the son of a blacksmith in a village near Tehran in 1956, Mr Ahmadinejad's parents moved the family to the capital when he was one year old. In 1976, he won a university place to study civil engineering and before long became a prominent figure in the student movement that was so influential during the Islamic Revolution in 1979.

Mr Ahmadinejad volunteered for and served with the Islamic Revolutionary Guards during the 1980-88 Iran-Iraq war. He is reported to have served in an elite unit deployed in 'extraterritorial' missions in northern Iraq, before becoming chief engineer of the sixth army.

Speculation about Mr Ahmadinejad's activities during his student and military days has been rife since his election victory on June 24. Iran's new president has been accused of being, among other things, a leader of the US embassy hostage-takers, an advocate of also storming the Soviet embassy in Tehran, and the planner for a series of assassinations of Iranian opposition figures in Europe. The first claim, and the widely circulated photo used to support it, has since been discredited. Speculation about the others remains intense, but even if true, such stories are unlikely to have much impact on his standing at home.

With the support of the Revolutionary Guards, Mr Ahmadinejad earned a doctorate in traffic and transport from Tehran's University of Science and Technology in the late 1980s. He later worked there as a lecturer, did a stint as an adviser to the conservative Ministry of Culture and Islamic Guidance, and was eventually appointed governor of Ardabil province.

In 1997, the winds of political change turned gale-force in Iran and blew Mohammad Khatami into the presidency. As part of the old team, Mr Ahmadinejad was blown out of office and back to relative obscurity in Tehran. But after five years of the stalled and stymied reforms of the Khatami government, the first sign that those winds were changing again came when just 12 per cent of voters turned out for the Tehran city elections of 2003.

The mass display of voter apathy was blamed on a public so disillusioned by the inability of the reformers to be true to their name that they could see no point in voting at all. It was a key moment. Most of the voters who did cast a ballot were hardcore conservatives. The party they elected chose Mr Ahmadinejad to be Tehran's new mayor.

As mayor, Mr Ahmadinejad's conservative agenda quickly became apparent. The city's male employees were ordered to wear beards and long sleeves; marketing campaigns for motor oil featuring cardboard cutouts of David Beckham and Michael Schumacher were banned; and reform-minded editors of city-owned newspapers were sacked.

But while these moves angered the vocal and wealthy liberals of northern Tehran, it was Mr Ahmadinejad's attempts to trim departments stacked with underutilised employees and weed out corruption and patronage that resonated more with the millions of poor in the rest of the city.

When it came to campaigning for the presidency these achievements were trumpeted, along with Mr Ahmadinejad's humble lifestyle, as evidence he was a political outsider who wasn't afraid of taking on the corrupt establishment. Unlike the slick efforts of Akbar Hashemi Rafsanjani, whom Iranians will tell you is 'one of the richest men in the world' and 'totally corrupt', Mr Ahmadinejad's campaign was simple.

A self-described principlist - that is, his political actions are based on Islamic and revolutionary principles - perhaps the campaign's most effective message was a film of Mr Ahmadinejad sitting in his sparsely furnished 750-square-foot apartment while a narrator asked: 'Where's the swimming pool?' It's easy to see how Mr Ahmadinejad's stated goal of 'putting the petroleum income on people's tables' struck a chord.

As president, Mr Ahmadinejad's main domestic priority will be improving the economy and creating jobs in a country where about 70 per cent of the population are under 25 years old. On the international stage - a place he is not at all familiar with - he'll be the public face of Iran's drive to master the nuclear energy process.

Within Iran, the nuclear issue has become a matter of national pride. The more Iranians hear the US or Europe telling them they must stop their nuclear activities, the more determined they are to carry on. Even many liberals who despise their rulers feel Iran has a right to pursue nuclear energy. And with the average Iranian using 2.7 times the energy the average European uses, there is a credible argument to support the Iranian claim that they need to expand their fuel sources beyond oil.

Iran's main nuclear reactor outside Bushehr, which was begun by the US in the 1970s and is being finished by Russian companies, is near completion. Israel has vowed to stop it ever coming on-line, so dusty Bushehr on the Persian Gulf coast may be a place to avoid in the days before the grand opening.

Nuclear weapons are a different issue. In Iran recently, I was told repeatedly that the idea of the ruling clerics having their fingers on the nuclear button didn't bear thinking about. They were quick to concede, however, that the 'North Korean option' was the 'best insurance against an attack by the Americans or Israelis'.

Mr Ahmadinejad has said he has no intention of stopping Iran's nuclear programme, which he described as 'a flood which cannot be stopped by a match stick' or 'irrelevant words'.

It's a line that will sit well with the conservative clerics to whom the president is ultimately answerable. Those men, made up of the Supreme Leader Ayatollah Ali Khamenei and the 12 members of the Council of Guardians, hold a power of veto over any legislation passed by the Majlis. When you consider these men have been behind the nuclear programme for years, it seems unlikely that Mr Ahmadinejad will have much choice but to toe the line. And as Mr Ahmadinejad was the only presidential candidate to speak out against improving ties with the US, a detente seems as far away as ever.

Here lies the first of Mr Ahmadinejad's three main problems.

Relations with Europe and the US have become so focused on the nuclear issue that it has become the shadow in which all other dealings are done. With the economy his stated priority, it looks increasingly likely Mr Ahmadinejad will need to walk a tightrope between the desires of the ruling mullahs and the pragmatic requirements of an economic recovery if he is to deliver on his promises.

The mullahs and the conservative establishment are his second problem. Not only do they have more power than the president, they sit atop the rotten but very profitable political and economic system that Mr Ahmadinejad campaigned so effectively to change.

These clerics are none too comfortable with the brand of egalitarianism Mr Ahmadinejad represents, because it spotlights the contradictions of the conservative revolutionary movement. No president has yet been able to defy them, and despite the clear mandate he received to stop the patronage and better distribute the oil wealth, Mr Ahmadinejad is so indebted to the mullahs for coalescing the conservative vote that he is an unlikely candidate to snap that streak.

Without improved foreign relations and meaningful change at the top, Mr Ahmadinejad's reforms seem almost impossible to achieve. And if the people can't measure the improvements by the number of rials in their pockets, the president will face his third and most difficult problem - a boil over of social discontent.

A majority of Iranians want economic reform more than social reform. If the religious hardliner in Mr Ahmadinejad orders a rollback of some of the social reforms of the Khatami years without compensating with more jobs and cash, his support will evaporate.

Like Mr Khatami before him, Mr Ahmadinejad will be seen as an appendage of the ruling class, and that will make him the enemy. The road from there is very windy indeed.