That appears to be the thrust of today's Washington Post article. Sooner or later, the government will have to do something about Mousavi. The regime cannot allow him to continue his defiance, lest he pull away other crucial members of the ruling class. At the same time, his arrest or death risks sparking ever greater demonstrators in the streets, more unrest, more violence, and nationwide strikes.
It's as I've said before. The fascist government of Iran is stuck between a rock and a hard place. And they've played this game before, 30 years ago. This is a very dangerous standoff for Mousavi, and this could still end any number of ways. We aren't out of the woods yet, not by a long shot.