The Iranians thought the situation would be brief as well. They initially planned for a week long operation. The Ayatollah Khomeini was intimately involved from the beginning. Initially, the students used an Imam, who was close to Khomeini, to relay messages. He had given his consent for the takeover, but remained removed from the situation directly in order to deny complicity.
The provisional government of Iran was extremely displeased with the actions of the students. Attempting to maintain political control of Iran after a revolution was their primary concern, this was just a sideshow distraction to them. Additionally, the Premier felt as though by the students overtaking the Embassy would only cause more U.S. involvement in Iranian affairs, not cause it to decease. The Premier had told American diplomats he would be able to have the hostages released in a few days.
The provisional government collapsed within a week and with it, hope of a quick resolution to the crisis. With the collapse, the Khomeini had complete control of Iran. The hostages proved to be a public relations coup for the Ayatollah and he decided to continue the crisis as long as it was politically beneficial to him.
President Jimmy Carter initial response to the crisis proved to be way of the mark as he underestimated the resolve and motives of the students. Speaking to a members of the hostage's families who had gathered in Washington, DC, he told them "I don't think this will last long, they are religious people....they will do what is right."
Khomeini was adept as using the crisis for propaganda and exploiting it for political gain. A few weeks after the crisis was initiated, he ordered the release of 13 women and African-Americans, citing they were victims of oppression and women had a sacred place in Islam. Some of the higher ranking women and African-Americans were still held captive under the auspice of being spies.
Note: Later in the crisis, a hostage who was diagnosed with multiple sclerosis was also released, leaving the final number at 53 hostages.
The video above is President Carter's reaction to the crisis. In response, the United States embargoed importation of Iranian oil and froze 8 billion dollars in Iranian assets in the United States. After this initial diplomatic sanctions, President Carter would offer very little, if nothing, of additional diplomatic efforts to free the hostages.