The State Department's decision begins the formal process of removing the People's Mujahedin of Iran from the Foreign Terrorist Organizations list, two senior administration officials knowledgeable on the matter told The Washington Post.
The action was announced six days after the dissident group left its former enclave in eastern Iraq for a one-time U.S. military facility near Baghdad, avoiding a potential confrontation with Iraqis who want the dissidents out of the country.
The group has a violent past and has been blamed for the deaths of several U.S. citizens inside Iran during the 1970s. But advocates for removing the group from the terror list note that it has rejected violence and has provided intelligence on Iran's nuclear program.
PMOI leaders have been trying for nearly 10 years to get U.S. officials to remove the terrorist designation, which they say has hurt their effort to relocate outside of Iraq, the Post said. Removing PMOI from the State Department's list could make it easier for its members to seek refugee status or try to settle abroad, the Post said.
The United States has lobbied European allies to accept up to 1,000 dissidents, while discussing whether to allow others to apply to emigrate to the United States, the Post said.
U.S. officials who helped mediate between Iraq and the PMOI leaders over the exiles' living quarters warned that removing the terrorist label may not end group's troubles or the U.S. role in helping find members find homes elsewhere.