The European Union said it listed Hezbollah's military wing because of concern over its influence in the region. Hezbollah fighters have joined the fight in Syria against anti-government forces.
EU foreign policy chief Catherine Ashton said Monday any financial assistance extended to Lebanon would not be affected by the decision. Hezbollah holds political office in Lebanon.
U.S. State Department spokeswoman Jen Psaki said Tuesday "the influx of Hezbollah and fighters from Iran [into Syria] were all of great concern" to Western allies.
Ghazanfar Roknabadi, the Iranian ambassador to Lebanon, told his counterparts in Beirut he appreciated Hezbollah's role in the region, Iran's state-funded broadcaster Press TV said.
Hezbollah, in a statement carried Wednesday by Press TV, said the EU decision was written "with Israeli ink." Hezbollah claimed victory in a 2006 war with Israel.
Iranian Deputy envoy to the United Nations Gholam Hossein Dehqani added Hezbollah was "part of Lebanon's social and political structure," noting the EU decision would do little to diminish its influence.
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