The United States believes Iran may be heading toward a military dictatorship and that its Revolutionary Guard Corps is supplanting its government, U.S. Secretary of State Hillary Clinton said on Monday.

Here are some questions and answers about the IRGC, which has expanded in the last 30 years into a potent force with sprawling military, political, social and economic interests:

* WHAT IS THE IRGC?

-- The IRGC was set up after the 1979 Islamic revolution to protect the ruling system against internal and external threats and to uphold revolutionary values. It answers to Supreme Leader Ayatollah Ali Khamenei, the Islamic Republic's top authority.

-- It controls the Basij religious volunteer militia, famed for human wave attacks in the 1980-88 war with Iraq. The Basij are Iran's moral police, enforcing Islamic social codes and quelling civil unrest. They are said to number millions.

-- Qods (Jerusalem) Force is a shadowy IRGC special operations unit, handling activities abroad. The United States, which says the Qods Force backs militants in Iraq, Lebanon and Afghanistan, has imposed sanctions on firms and individuals linked to what it brands a terrorist organization. The United States has also designated the IRGC a proliferator of weapons of mass destruction for what it says is its role in Iran's nuclear and ballistic missile programs. Tehran says its nuclear program has only peaceful purposes.

* WHAT ARE THE IRGC'S MILITARY CAPABILITIES?

-- The IRGC, initially focused on internal security, became a more organized combat force during the war with Iraq, and now has about 125,000 fighters with army, navy and air units. It operates separately from the 350,000-strong regular army.

-- Guardsmen fought in conventional battles against Iraq, but they also developed irregular tactics, such as hit-and-run raids using small craft targeting shipping to try to knock out Iraq's oil exports. Such tactics could be revived. An Iranian military commander has said martyrdom-seeking Basijis could disrupt Gulf oil shipping routes if the need arose.

-- The IRGC controls Iran's strategic missile forces and has played a key role in developing advanced systems such as the Shahab-3 missile with a range of 2,000 km (1,250 miles).

* HOW DOES IRGC OPERATE IN THE POLITICAL SYSTEM?

-- The IRGC's mandate to protect revolutionary values has prompted it to speak out when it felt the system was threatened.

-- The IRGC's influence appears to have grown since hard-line President Mahmoud Ahmadinejad came to power in 2005. Two-thirds of his first 21-man cabinet were IRGC veterans, like himself.

-- Some analysts have suggested the corps' political power already eclipses that of Ahmadinejad. Given Khamenei's reliance on the Guard to quell dissent, the supreme leader himself may now be hostage to the force he commands, some analysts argue.

-- Others have said the IRGC leadership is factionalized and lacks the cohesion to exercise power independently. Some ex-Guard officers, such as Parliament Speaker Ali Larijani, Tehran mayor Mohammad Baqer Qalibaf and defeated presidential candidate Mohsen Rezaie, are critics of Ahmadinejad. -- The IRGC also conducts popular military training, operates a domestic media apparatus and runs education programs to inculcate loyalty to the revolution.

* WHAT ABOUT BUSINESS INTERESTS?

-- After the war with Iraq, the IRGC became heavily involved in reconstruction and has expanded its work to cover areas such as import-export, oil and gas, defense, transport and construction.

-- The Corps has become a major contractor, with ties to firms controlling billions of dollars in business, construction, finance and commerce, the U.S. Treasury has said.

A 2009 RAND Corporation report said Khatam al-Anbia, an engineering firm affiliated to the IRGC, was awarded more than 750 contracts in construction, infrastructure and energy projects. It said the Guards are also reported to control an underground economy of black-market goods smuggled into Iran via illegal jetties and other entry points under their sole control.

Sources: Reuters, Globalsecurity.org, International Institute for Strategic Studies - Military Balance 2010, RAND Corporation, U.S. Treasury Factsheet 2007

(Writing by Alistair Lyon and David Cutler)

Afghanistan Iraq Hillary Clinton