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Reporting from Paris and Beirut -- The European Union today announced the removal of a high-profile Iranian opposition group from its list of terrorists, a victory for a movement that European governments have described as a dangerous sect and prosecuted on terrorism charges.

The change in the status of the Mujahedin Khalq organization, or MKO, which seeks to overthrow the Iranian government, is likely to complicate attempts by the international community to reach a diplomatic settlement with Tehran over a range of issues.

The decision, announced at a meeting of EU foreign ministers in Brussels, results from recent legal and diplomatic developments combined with intense lobbying by the group, whose leader, Maryam Rajavi, lives in France.

Iran's Foreign Ministry issued a statement decrying the ruling as a violation of U.N. Security Council Resolution 1373, which requires governments to freeze the funds and halt the activities of those involved in acts of terrorism.

"The MKO's hands are stained with the blood of thousands of innocent Iranians and non-Iranians," said the statement, according to the Iranian Students News Agency. "The delisting is invalid and condemned."

Analysts said European leaders likely acted out of diplomatic expediency because of the impending expulsion from Iraq of nearly 3,000 of the opposition group's military wing, who once fought against their homeland on behalf of Iraqi leader Saddam Hussein. Europe may f... >>>