Iran yesterday dismissed a US plan to list its elite Revolutionary Guard as a terror group in a bid to strangle the economic influence of one of the Islamic republic's key institutions.
Iran's foreign ministry described as "propaganda" moves by US President George W. Bush's administration to issue an executive order blacklisting the group in order to block its assets.
The Revolutionary Guard -- whose influence extends well beyond the military into business and politics -- would be the first national military branch included on a US list of individuals and institutions linked to terrorism.
"This kind of news is within the propaganda and psychological activities of the US statesmen against the Islamic Republic of Iran and it is professionally worthless," a foreign ministry source told the official IRNA news agency.
Gholam Hossein Gheib Pavar, Revolutionary Guard commander in the southern Fars province, scoffed: "When the enemy calls us terrorists this is a great honor and it shows the anger of the enemy."
"But they are ignorant of the reality that our revolution is connected to the revolution of [the Shiite] Imam Hossein," he said, according to IRNA.
The US -- which accuses the Revolutionary Guard of stirring unrest in Iraq and supplying bombs for deadly attacks on US troops -- is seeking to cut off the force's financial lifeblood.
As well as being an elite military force with tens of thousands of troops, the Guard has been successful in picking up billion dollar contracts for building infrastructure in Iran.
Last year, the Guard won a contract worth US$2.09 billion to develop phases 15 and 16 of Iran's biggest gas field, South Pars and a US$1.3 billion deal to build a pipeline to Pakistan.
The Revolutionary Guard is also at the center of Iran's politics -- President Mahmoud Ahmadinejad is a former officer and has promoted several former Guard members to top posts since taking office in 2005.
The Guard's chief commander warned on Wednesday that the force had covered the "length and breadth" of the Gulf -- a region that is home to one US naval base and where one US aircraft carrier is currently patrolling.
"We have surface-to-sea missile systems that can cover the length and breadth of the Persian Gulf and Sea of Oman," Yahya Rahim Safavi told Iran's international Persian language Jam-e Jam television channel.
"No boat or vessel can cross the Persian Gulf without being within the range of our coastal missiles," he warned in an interview, which was reproduced by the Fars news agency.
The US administration's intentions were revealed late on Wednesday by a US government official but have yet to be officially announced.
The State Department refused to give details of the planned action, saying it would not divulge "anything that may be actively under consideration."
The Washington Post said the blacklisting would be made under an executive order -- which Bush signed two weeks after the Sept. 11, 2001 attacks -- aimed at obstructing terrorist funding.
The New York Times, quoting senior officials, said current plans called for the declaration to be made this month.