Treasury targets Hezbollah construction arm

WASHINGTON (Reuters) - The U.S. Treasury Department on Tuesday designated a Lebanon-based construction company operated by Hezbollah as a terrorist organization, accusing it of bolstering the militant group's public standing by rebuilding war-torn areas.

The action by the Treasury bans Americans from doing business with Jihad al-Bina and freezes any assets the construction firm may have under U.S. jurisdiction.

The Treasury said Jihad al-Bina receives direct funding from Iran, is run by Hezbollah members and is overseen by Hezbollah's governing Shura Council.

"Hezbollah operates Jihad al-Bina for its own construction needs as well as to attract popular support through the provision of civilian construction services," Stuart Levey, Treasury's under secretary for terrorism and financial intelligence, said in a statement. "We will take action against all facets of this deadly terror group."

Jihad al-Bina, whose name translates as "construction for the sake of the holy struggle," has been involved in debris clearance and reconstruction efforts in southern Lebanon following Hezbollah's month-long conflict with Israel in the summer of 2006.

The Treasury said these services were bolstering the standing of Hezbollah, which the U.S. government has designated a terrorist organization under various executive orders starting in 1995.

"At the same time that we are targeting Hezbollah's construction company, the U.S. government is working to ensure that legitimate reconstruction efforts, led by the Lebanese government, succeed," Levey said.

U.S. Secretary of State Condoleezza Rice announced $770 million in aid to Lebanon at a January donors conference in Paris, following $230 million in reconstruction and security assistance pledged by President George W. Bush in August 2006.