WASHINGTON The United States may soon name Iran's Revolutionary Guard Corps a foreign terrorist group, said U.S. officials on Wednesday, reflecting frustration over Tehran's nuclear program and suspected role in Iraqi violence.
The designation would be the first time the United States has placed the armed forces of any sovereign government on its list of terrorist organizations and enables Washington to target the Iranian group's finances.
Iran experts and diplomats said the squeeze on financing for the Guards also was aimed at pacifying hard-liners within and outside the Bush administration who want military action against Tehran and are frustrated that diplomatic pressure has not worked either on curbing the nuclear program or over Iraq.
A U.S. official, who spoke on condition he was not named because the issue was so sensitive, said the United States was looking at making the designation soon but the final timing had not been decided. Another official confirmed the same.
Analysts said the sanctions would be difficult to enforce and the main goal seemed to be to put pressure on Iran by using the designation to press financial institutions to cut ties with Iranian businesses.
The United States has briefed its allies on the move but not indicated when it will be announced, said a Western diplomat, who also asked not to be named.
The designation was first reported on Wednesday by The New York Times and The Washington Post, which said it could be made under an executive order signed by President George W. Bush after the September 11 attacks to obstruct terrorist funding.
State Department spokesman Sean McCormack declined comment on internal deliberations but said Washington was "confronting Iran's behavior on a number of different battlefields."
The United States is particularly concerned about incidents involving explosively formed penetrators, known as EFPs, in Iraq, deadly armor-piercing bombs that have killed many U.S. troops and are suspected of being supplied by Iran.
White House spokeswoman Dana Perino said it was inappropriate to discuss future actions and urged Iran to stop providing support to "terrorist" organizations.
The initial response from Iran was dismissive.
"Such a report is in the framework of the propaganda and psychological activity of the American administration against the Islamic Republic of Iran," Iran's official IRNA news agency quoted an unnamed Foreign Ministry official as saying.
Iran analyst Karim Sadjadpour of the Carnegie Endowment for International Peace said the rationale appeared domestic, with the State Department increasingly "maligned" by Vice President Dick Cheney and others for talking with Iran.
In recent months, the United States has held several meetings with Iranian officials to discuss what it sees as Iran's destabilizing role in Iraq, a charge Tehran denies.
"By taking a measure like this, the State Department is assuring the president that they are not being complacent and that there are still non-military sticks that can be employed to isolate Iran and change its behavior," Sadjadpour said.
Iran is already on the U.S. state sponsors of terrorism list but labeling the Guards a terrorist group would mean Washington could go after its finances and expanding business network.
Iran expert Ray Takeyh of the Council on Foreign Relations said punitive moves against Iran's Revolutionary Guards would undermine any long-term goal of negotiating with Tehran.
"It makes the idea of a negotiated settlement with Iran more difficult if one important segment or pillar of the state is ostracized or sanctioned," Takeyh said.
Washington is pushing the U.N. Security Council to prepare a third sanctions resolution against Iran because of its refusal to give up sensitive uranium enrichment work but is having problems getting agreement from Russia and China.
"This sends a message to others within the U.N. that we need a robust resolution," said a Western diplomat.
Iran argues it is enriching uranium for peaceful civilian energy purposes and says it is not aimed at building the nuclear bomb the United States and others suspect.
(Additional reporting by Matt Spetalnick in Crawford, Texas)