PARIS AND BEIRUT — The European Union on Monday announced the removal of a high-profile Iranian opposition group from its list of terrorists, a victory for a movement that European governments have described as a dangerous sect and prosecuted on terrorism charges.
The change in the status of the Mujahedin Khalq organization, or MKO, which seeks to overthrow the Iranian government, is likely to complicate attempts by the international community to reach a diplomatic settlement with Tehran over a range of issues.
The decision, announced at a meeting of EU foreign ministers in Brussels, results from recent legal and diplomatic developments combined with intense lobbying by the group, whose leader, Maryam Rajavi, lives in France.
Iran's Foreign Ministry issued a statement decrying the ruling as a violation of U.N. Security Council Resolution 1373, which requires governments to freeze the funds and halt the activities of those involved in acts of terrorism.
"The MKO's hands are stained with the blood of thousands of innocent Iranians and non-Iranians," said the statement, according to the Iranian Students News Agency. "The delisting is invalid and condemned."
Analysts said European leaders probably acted out of diplomatic expediency because of the impending expulsion from Iraq of nearly 3,000 members of the opposition group's military wing, who once fought against their homeland on behalf of Iraqi leader Saddam Hussein. Europe may find itself providing refuge for some of those fighters, and could not do so if the terrorist label persisted.
Iran quickly signaled that the move could complicate deliberations with the West, which wants Tehran to curtail sensitive aspects of its nuclear program and rein in support for militant groups opposed to Israel.
"The EU plans to use the MKO as leverage against Iran in the nuclear talks," said an editorial Monday in the conservative daily Politics of the Day. "The EU should tell the world why it blacklists Lebanese and Palestinian resistance groups fighting Israeli aggression but clears the MKO, which has committed countless crimes in Iran and Iraq."
Protesters in Tehran gathered around the French and German embassies to denounce the decision, according to the official Islamic Republic News Agency, demanding the "extradition" of MKO members "who have killed many of our children and families."
Opposition leader Rajavi in turn described the decision as a "stinging defeat for the European policy of complacency" toward the Iranian regime. "The inscription of the Iranian resistance on the blacklist has helped prolong the regime of religious fascism in Iran," she said, according to a report by Agence France-Presse.
The MKO remains on the U.S. list of terrorist organizations, a designation it acquired in 1997. European leaders made it clear Monday that they do not view the organization as fully rehabilitated. French Foreign Minister Bernard Kouchner and several colleagues warned that the MKO could be again designated as a terrorist group depending on its activities and on a French appeal of a Dec. 4 decision by an EU court to unfreeze nearly $9 million of the group's assets.
The MKO was founded in the 1960s as a radical and often violent guerrilla group opposed to the U.S.-backed monarchy of Mohammed Reza Shah Pahlavi. It took part in the 1979 revolution that ousted him.
But the group quickly fell out with Ayatollah Ruhollah Khomeini and the rest of the country's clerical leadership. Many of its supporters were jailed, and the MKO launched a campaign of bombings against leaders of the revolutionary government.
During the 1980s Iran-Iraq war, the group fought alongside Hussein's troops against the Islamic Republic, a move that earned it the anger of many Iranians. Iraqi Kurds allege that the MKO helped crush an uprising against Hussein after the 1991 Persian Gulf War.
Several thousand members live in Camp Ashraf, a desolate patch of desert and tumbleweed near Baqubah, Iraq. A 2005 report by Human Rights Watch said the camp was rife with abuse, citing evidence of "prolonged incommunicado and solitary confinement" as well as "beatings, verbal and psychological abuse, coerced confessions, threats of execution, and torture" against members who don't conform to the group's sometimes bizarre rules and rituals.
Its blend of Islamist and Marxist ideologies alienates both supporters and opponents of the Islamic Republic. Iran watchers in Europe and the U.S. say the organization has little public appeal. But it mounted an all-out lobbying campaign that won over legislators, especially in Britain, according to Farhad Khosrokhavar, an Iranian French expert on Islamic extremism.
"They have been very successful at giving a positive picture of themselves in Europe," Khosrokhavar said in a telephone interview. "I think many people have been duped by them, especially in the British Parliament."
Khosrokhavar predicted that the EU decision would only increase Iran's animosity toward the West.
"The Islamic Republic will be stronger in its suspicion of the West and European Union," he said. "My guess is they will be angry, and the one issue where they will be even more inflexible is the nuclear issue."
Rajavi and other leaders were arrested in 2003, when more than 1,000 police officers raided their compound outside Paris. France's top anti-terrorism judge charged that they were involved in terrorism in Iran and plotting violence in Europe as well.
The investigation, which was assisted by the FBI in the United States, did not turn up powerful proof. A lawyer for the group said Monday that prosecutors should throw out the still-pending case.
"One finds oneself confronting a judicial dossier that is empty of substance after the removal from the list," said the lawyer, Patrick Badouin, according to French reports.
Times staff writer Sebastian Rotella in Madrid contributed to this report.