The region now called Iran was occupied by the Medes and the Persians in the 1500s B.C., until the Persian king Cyrus the Great overthrew the Medes and became ruler of the Achaemenid. During the Qajar dynasty, the Russians and the British fought for economic control of the area, and during World War I, Iran's neutrality did not stop it from becoming a battlefield for Russian and British troops. A coup in 1921 brought Reza Kahn to power. In 1925, he became shah and changed his name to Reza Shah Pahlavi. He subsequently did much to modernize the country and abolished all foreign extraterritorial rights.
Iranian hostility toward Washington was reinforced by the Carter administration's economic boycott and deportation order against Iranian students in the U.S., the break in diplomatic relations, and ultimately an aborted U.S. raid in April 1980 aimed at rescuing the hostages. As the first anniversary of the embassy seizure neared, Khomeini and his followers insisted on their original conditions: guarantee by the U.S. not to interfere in Iran's affairs, cancellation of U.S. damage claims against Iran, release of $8 billion in frozen Iranian assets, an apology, and the return of the assets held by the former imperial family. These conditions were largely met and the 52 American hostages were released on Jan. 20, 1981, ending 444 days in captiv.