The Bush administration is planning to designate Iran’s Revolutionary Guards as a “terrorist” organization, a U.S. official revealed on Wednesday in comments not yet officially confirmed by the U.S. State Department, which declined to provide details of the planned measure, saying it would not divulge "anything that may be actively under consideration."

But according to the New York Times, the Washington Post and the Associated Press, the Bush administration is moving towards blacklisting the Revolutionary Guards -- whose influence extends well beyond the military into business and politics. If the measure is approved, it would raise serious concerns over whether it is part of Washington’s relentless efforts to isolate Iran economically or a step towards military action.

The Revolutionary Guard Corps (known as the Pasdaran) was formed after the Iranian revolution in 1979. It forms a significant but separate part of the Iranian armed forces, with internal security and border protection responsibilities, but it also operates Iran's ballistic missiles.

Although Iran itself has already been on the U.S. government “state sponsors of terrorism” blacklist for more than two decades, the move would mark the first time that a national military force had been labeled a “terrorist” group. That classification would probably cover the Revolutionary Guards as a whole though there have been discussions about limiting it to the Guards’ Quds (Jerusalem) Force -- in charge of covert operations -- that the U.S. allegedly accuses of arming Shia fighters in Iraq and the Taliban in Afghanistan; charges strongly denied by the Islamic Republic, which insists that the presence of U.S. occupation troops is the main reason behind the unrest in the region.

The U.S. measure against the Revolutionary Guards would be seen as a move against Iranian President Mahmoud Ahmadinejad, who was a former officer and has promoted several former Guards members to top posts since taking office in 2005.

It would also highlight differences about Iran between the United States and two of its allies in the region -- Iraq and Afghanistan, both of which have strong relations with Tehran.

Financial squeeze

According to an editorial on the BBC, designating the Revolutionary Guards as a “terrorist” group is mainly aimed at strangling the Guards’ economic power, and limiting the international operations of its commercial activities; including its role in managing Iran’s airport and underground transport systems.

As well as being an elite military force with tens of thousands of soldiers, the Guards has been successful in winning billion-dollar contracts for building infrastructure in Iran. In 2006, it won a 2.09 billion dollar contract to develop phases 15 and 16 of Iran's biggest gas field, South Pars, and a 1.3 billion dollar deal to build a pipeline to Pakistan.

Two UN Security Council resolutions, in December and March, sought to target Iran’s trade in material and equipment linked to its nuclear and ballistic missile programs. They also named three aviation companies run by the Revolutionary Guards as well as seven of its officers. But the new U.S. order would broaden these sanctions. It would step up pressure on Washington’s allies and business partners to limit their dealings with Tehran.

The U.S. Treasury Under-Secretary Stuart Levey, in charge of an economic counter-terrorism unit, has been touring Europe this summer asking governments and businesses, especially banks, to stop dealing with Iran.

Nicholas Burns, Under-Secretary at the Department of State, told a Senate committee earlier this year: "We have used our influence to convince leading European banks to stop all lending to Iran. We have convinced European governments and Japan to begin reducing export credits."

The United States is also stepping up its efforts to get another UN resolution imposing further sanctions against Iran over its nuclear program. Negotiations over another resolution are expected to be held in New York in September but China, for one, has been reluctant to go too far.

Meanwhile, U.S. allegations of Iran’s meddling in Iraq are growing. "The American people should be concerned about Iran. They should be concerned about Iran's activity in Iraq, and they ought to be concerned about Iran's activity around the world,” the U.S. President George W. Bush said at a news conference last week.

"Superficial measures"

But all these measures against Iran didn’t force it to suspend uranium enrichment activities, which the West claims is aimed at building an atomic bomb despite Tehran’s insistence that it‘s strictly peaceful.

In a defiant statement, the Revolutionary Guards scoffed at the U.S. blacklist plan, saying: "The identity of the Guards has terrified the enemies of this system and the revolution… This has forced them to hastily find a pretext to issue superficial measures in a bid to hurt this sacred body… Those who are absorbed by the world's materialism cannot understand the depth of the spiritual power and iron will of the Revolutionary Guards.”

All this leads to one question: is the new American move aimed at paving the way for a military strike against Iran’s nuclear sites?

The United States has never ruled out the use of force against Iran. One of Iran’s top regional commander issued a stark warning to Washington against making such a move. "If the sworn enemy of the revolution wants to have any military provocation in the Persian Gulf against Iran's borders then the Persian Gulf will be come a hell for them," said naval commander Ali Razmjou.

There have been reports that Vice-President Dick Cheney does not want to rule out military action against Iran. Others suggest that the Secretary of State Condoleezza Rice prefers toughening up the diplomatic approach, which is why she is backing the "terrorist" designation.

Only time will tell which camp will win.

PHOTO CAPTION

Iran's elite Revolutionary Guard special forces participate in military manoeuvres near the Gulf in 2006