President Ahmadinejad was talking about the occupying regime which is a form of government. On Feb 20, 2006 Iran's foreign minister said, "He is talking about the regime."
President Ahmadinejad also said in his speech that the issue with Palestine would be over "the day that all refugees return to their homes [and] a democratic government elected by the people comes to power."
In his letter to Bush (see Text of Iranian President's Letter to President Bush: http://representativepress.blogspot.c... ), he asks, "are we to understand that allowing the original inhabitants of these lands - inside and outside Palestine - whether they are Christian, Muslim or Jew, to determine their fate, runs contrary to principles of democracy, human rights and the teachings of prophets?"
President Ahmadinejad Calls for Democracy, Free and Fair Elections and a Durable Peace. http://representativepress.blogspot.c... Mike Wallace Interviewed Iranian President Mahmoud Ahmadinejad on 60 Minutes. At the request of the Iranian President Ahmadinejad, the FULL UNEDITED version was shown on C-SPAN. "The cable public affairs net will air the 60 Minutes edited version, followed by the full 90-minute interview, to give viewers a window on what is left on the cutting room floor." - John Eggerton -- Broadcasting & Cable, 8/11/2006 We can see what they cut out, a call for democracy.