The Bush administration is considering a move to designate Iran's Revolutionary Guard Corps a foreign terrorist organization. Such a step would subject business interests of the elite Iranian military branch to U.S. financial penalties. VOA's David Gollust reports from the State Department.

Iranian Revolutionary Guard (file photo)

The action, which officials here confirm is under consideration, would be the first time the United States has placed the armed forces of any foreign government on a list of terrorist organizations.

U.S. officials link the Revolutionary Guards, an elite branch of the Iranian military, with Iran's presumed nuclear weapons program and the smuggling into Iraq of armor-piercing weapons being used with deadly effect against American troops.

Both the New York Times and the Washington Post reported Wednesday that action against the Revolutionary Guard is pending. The Post said the designation would be made under an executive order issued by President Bush after the September 2001 terrorist attacks aimed at obstructing the funding of terror groups.

Briefing reporters, State Department Spokesman Sean McCormack said he would not discuss administration actions that might be under consideration, saying among other things that an early tip-off might allow the prospective targets of U.S. sanctions to move threatened assets.

At the same time however, McCormack stressed U.S. concern about the Revolutionary Guard Corps, which he said has been depicted as a "state-within-a-state" with "tentacles" extending into commercial businesses as well as a range of terrorist-related activity.

"We all know about their support for those groups that are going after our troops in Iraq," he said. "We also have talked about their supplying arms to the Taleban in Afghanistan, and there have also been numerous news reports about their linkages with Hezbollah and other terrorist organizations around the world. So quite clearly, this is an entity within the Iranian government that is engaged in a number of different activities."

A designation against the Revolutionary Guard Corps under the 2001 White House directive would block any assets it may have in U.S. banks and make it illegal for U.S. citizens and residents to have any dealings with it.

It is unclear what practical effect such a move would have, but U.S. officials say it would greatly increase international scrutiny of the Guard Corps' business activities.

In addition to helping to push two sanctions resolutions through the U.N. Security Council over Iran's nuclear program, the Bush administration has also been pressing international banks and financial institutions to cease, or limit, business dealings with Iran.

McCormack said the aim of the effort is to persuade pragmatic elements within the Iranian government that seeking nuclear weapons and promoting terrorism are not in the country's long-term interest:

"The hope is that you find enough reasonable people within the Iranian government who say it's just not worth it to engage in these behaviors anymore, especially when there is something attractive on the other side on the nuclear front," he said. "There is still an attractive offer on the table for the Iranian government. They can have peaceful nuclear energy in such a way that the international community has objective guarantees that they're not going to use that technology, and those materials, to build a nuclear weapon."

The spokesman acknowledged that efforts to get a third, more stringent, sanctions resolution through the Security Council have lagged, though it is a matter of "consistent conversation" for top administration officials including Secretary of State Condoleezza Rice.

The sanctions push is likely to intensify next month when Rice will be in New York for the convening of the new U.N. General Assembly.