The Obama administration intends to take off its list of foreign terrorist groups an Iranian opposition group that was given shelter by Saddam Hussein in Iraq and has renounced violence.
Secretary of State Hillary Rodham Clinton's decision was prompted by the cooperation of the Mujahideen-e-Khalq (MeK) in relocating from Camp Ashraf, its paramilitary base north of Baghdad, to Camp Liberty, a temporary location near the Iraqi capital's international airport.
The State Department is informing Congress of Mrs. Clinton's intent to take the MeK off the Foreign Terrorist Organization list, said a U.S. official who spoke on background.
A formal announcement will be made within the next 10 days.
Iraqi Prime Minister Nouri al-Maliki has sought to shut down Camp Ashraf and move the Iranians out of Iraq.
A U.S. appeals court in June ordered Mrs. Clinton to decide within four months on removing the MeK from terrorist list.
Britain and the European Union took the MeK off their lists of terrorist organizations in 2008 and 2009 respectively.
The MeK was responsible for terrorist attacks in Iran in the 1970s that killed several U.S. military personnel and civilians, according to the State Department. The group denies any role in the deaths of U.S. military personnel.
Camp Ashraf's residents surrendered their weapons in 2003 as part of a cease-fire agreement with U.S. forces.
Questions still remain about the MeK's commitment to democratic principles.
"We are still seeing an organization that has a lot of lip service in believing in democratic principles," said the U.S. official.
"But when you look at it strictly in terms of whether they should be on the terror list or not, there has been a significant period of time when we have not witnessed terrorist activity and obviously the secretary had to take that into account and that they have renounced violence," the official added.
The Clinton administration designated the MeK as a foreign terrorist group in 1997 in an attempt to achieve a diplomatic breakthrough with the Iranian government.
The decision to take the MeK off the terrorist list could prompt criticism from Iran.
"It is what it is. We will continue to try to make progress on issues of concern with Iran regardless of that decision," said the U.S. official.
About 200 of the more than 3,000 MeK members in Iraq remain at Camp Ashraf. The rest have relocated to Camp Liberty.
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