Fresh from a stunning election victory, Mahmoud Ahmadinejad, Iran's impish new President, set off from Tehran on a mission to enlighten the world. Schooled in the Islamic revolution and groomed during the bloody Iran-Iraq war, the combative Iranian leader seemed undaunted as he stepped on to the global stage in 2005 for the 60th United Nations General Assembly meeting in New York, the beating heart of the “Great Satan”.

Ahmadinejad reported back to Iran's religious leaders that while he spoke about Iran's Islamic revolution he had been protected by a divine light that bathed the UN assembly. A “halo” had descended around him and held world leaders spellbound for nearly half an hour.

A friend who witnessed the address and met the Iranian leader during the visit came away with a very different impression. “Ahmadinejad is crazy,” he said. “I just hope that he does not drag us all down with him.”

The two versions of the same event perfectly encapsulate why it has proved so difficult for the West and Iran to reconcile their differences during the three decades since the Islamic revolution swept the Shah from power.

In the West's secular, global world it is almost impossible to understand a regime run by religious orthodoxy, where the clergy outranks the Government and the Koran caps the constitution.

Kasra Naji, an Iranian journalist who lived in Tehran during Ahmadinejad's rise to power, has produced a valuable book that fleshes out who the President is and how he rules. Certainly, he does not conform to the stereotype of most modern leaders. He fervently believes in the return of the “missing imam”, the Shia Muslim messiah, is unworldly to the extreme and flaunts his humble origins, particularly his trademark cheap beige jacket bought in the bazaar and now considered a fashion item in Tehran.

His ignorance in some matters of state, particularly economics, is startling. In his first two years in office, he removed £40 billion from Iran's oil fund to subsidise pet projects across the country. The result was runaway inflation and hugely unpopular petrol rationing in the world's second-largest oil exporter.

But behind a clumsy grasp of administration lies a sure populist touch. Ahmadinejad understands the concerns of ordinary Iranians and has defeated some of the most powerful forces in his country.

His simple home truths and rambling open letters to George Bush conceal a calculating politician who has forged key alliances with influential Iranian clerics in the holy city of Qom and kept on side key institutions such as the Revolutionary Guards.

Ahmadinejad is also ruthless. Diplomats and academics have been sacked and critics silenced all in the name of dragging Iran back to the revolutionary principles of the late Ayatollah Khomeini.

He has even demonstrated some flair on the world stage, despite being a complete novice in international politics. On coming to power he halted co-operation with the UN over Iran's nuclear programme, stepped up threatening rhetoric against America, and vowed to “obliterate” Israel. For good measure he also hosted a Holocaust denial conference.

From his perspective the gamble has paid off. Iran's nuclear programme has advanced. Ahmadinejad has built a following across the Middle East. Meanwhile, his nemesis, George Bush, will soon be stepping down from office.

What Ahmadinejad's story really reinforces is the desperate need for the West, and in particularly the next US president, to focus seriously on ending decades of hostility and mistrust with Tehran.

A much touted “grand bargain” to normalise relations between Washington and Tehran could at a stroke improve the fortunes of an entire region. It would probably also signal the end of characters such as Ahmadinejad, who feed off the conflict.

Ahmadinejad: The Secret History of Iran's Radical Leader by Kasra Naji

IB Tauris, £12.99; 298pp

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