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Iran Signs Tentative Deal with Boeing to Buy Passenger Jets

FILE - A Boeing 747 of Iran's national airline is seen at Mehrabad International Airport in Tehran, June 2003.

U.S. aerospace giant Boeing has signed a tentative deal to sell passenger jets to Iran, in what would be the biggest business deal between the U.S. and Iran in 37 years.

The transaction would be worth as much as $25 billion, with Iran buying at least 100 commercial jets for its state-owned airline.

With most economic sanctions against Iran lifted after it signed the recent nuclear deal, Iran Air is ready to expand its fleet. It already has made a pending deal with the European consortium Airbus for passenger planes.

Boeing says the Obama administration approved its initial deal with Iran after determining that Tehran is meeting its obligations under the nuclear agreement.

"Boeing will continue to follow the lead of the U.S. government with regards to working with Iran's airlines, and any and all contracts with Iran's airlines will be contingent upon U.S. government approval," a company statement said Tuesday.

On Tuesday, U.S. State Department spokesman John Kirby said Boeing's deal with Iran is the kind of permissible business activity as foreseen in the nuclear agreement, officially called the Joint Comprehensive Plan of Action.

"The JCPOA provides an opening for civil aviation companies, including American companies, to pursue legitimate commerce with Iran, and we note reports of progress in the aviation sector, which is good for both the economy and for public safety."

But Kirby said any U.S. approved license for aviation sales to Iran would include "appropriate conditions" to ensure that nothing is resold or transferred to anyone on the Specially Designated Nationals list — individuals under sanctions for terrorism and other activities as drug trafficking.

It is also unclear how Iran would pay for the planes because Tehran is still barred from doing business with U.S. banks.