Supreme Leader Ayatollah Ali Khamenei has formed a new body, headed by ex-Judiciary Chief Ayatollah Mahmoud Hashemi-Shahroudi, to address the ongoing conflict between the executive and legislature:
“In implementing line 7 of Article 110 of Constitution, the Supreme Council for Resolving Conflicts and Regulating Relations between the Three Branches of Government, has been formed to study and present consultations in order to resolve conflicts and regulate relations between the three branches…It is necessary that high officials of the regime cooperate together to resolve possible conflicts and work with the Council.” 
The formation of the Council highlights the extent to which the intensifying conflict between the executive, headed by President Mahmoud Ahmadinejad, and legislature, headed by Speaker Ali Larijani, is perceived as a problem at the highest levels of the regime. While it may be too soon to discern the full implications of the creation of the Council, three main points become immediately apparent.
First, by delegating the task of resolving differences in the regime to the Council, it appears that Khamenei desires to distance himself from the conflict between the executive and legislature. This follows a number of instances in recent months when Khamenei was forced to directly intervene in state affairs with a hokm-e hokumati, or ruling decree, the most important example being his vetoing of Ahmadinejad’s removal of the Intelligence Minister. As a result of Khamenei’s intervention, Ahmadinejad stayed home for 11 days exacting a political price from him by dealing a blow to his prestige as the final arbiter of the system who is above everyday politics. By removing himself from this conflict, Khamenei may hope to repair his political position and save his ruling decrees for circumstances where their added weight may prove decisive.
Second, this may be a prelude to a new round of attacks against Ahmadinejad. There is a precedent for this in the Islamic Republic’s history. In 1980 Khomeini created a similar council ostensibly to resolve the differences between ex-President Abol Hassan Bani-sadr and Majlis, then led by Ali Akbar Hashemi-Rafsanjani, but which in fact was used to relentlessly assault Bani-Sadr setting the prelude to his impeachment.  However, there are critical differences between Ahmadinejad and Bani-Sadr. For example Khomeini was opposed to Bani-Sadr’s presidency from the beginning, while Khamenei had strongly supported Ahmadinejad until very recently. Thus while the Council may be wielded as a weapon against Ahmadinejad, the Bani-Sadr impeachment scenario is unlikely to repeat itself here.
Third, this appears to be a direct attack against Rafsanjani, Chairman of the Expediency Discernment Council, a leader of the Pragmatist faction and ally of the Reformists. Rafsanjani’s Expediency Council, originally created by Ayatollah Ruhollah Khomeini to resolve differences between the legislature and the Guardian Council, while not specifically tasked with resolving conflicts between the three branches of government, would have been a logical choice for the task. By creating a completely new body Rafsanjani has been clearly passed-over, as was pointed out by Ayatollah Hassan Mamduhi, a member of the Assembly of Experts, in a report by Nasimonline.  As a leading regime figure, Rafsanjani’s name was not even mentioned as a relevant process to this Council. This action appears to send a message to Rafsanjani and the Reformists saying do not expect to gain anything from the conflicts in the Principalist camp.
Given the intensification of the conflict between the executive and legislature, it is difficult to see how this Council can resolve their differences when Khamenei himself was unable to bring an end to the quarrelling. In fact it may even accelerate the present trends of deepening rifts within the ruling Principalists and the neutralization of Rafsanjani and the Reformists as serious political players in Islamic Republic.