Victoria Nuland, a spokeswoman for the U.S. State Department, confirmed last week that lawmakers would consider removing the People's Mujahedin of Iran from the FTO list.
"We anticipate being able to make a public announcement about it sometime before Oct. 1," said Nuland.
The PMOI has a violent past, including ties to the deaths of U.S. citizens in Iran during the 1970s. The group rejected violence after surrendering to U.S. forces during the early part of the war in Iraq. Its political arm advocates regime change in Iran.
Ramin Mehmanparast, a spokesman for the Iranian Foreign Minister, said delisting the PMOI was counterproductive.
"The U.S. will violate its international commitments and undermine global efforts to combat terrorism if it removes the PMOI, which has a long record of terrorist activities, from its (FTO) list," he was quoted by Press TV as saying.
His criticism comes as Iranian President Mahmoud Ahmadinejad said he'd consider more favorable relations with the United States should Washington tone down its rhetoric on Tehran.