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NEW YORK (AP) — The Obama administration granted a victory Friday to a militant Iranian organization formerly allied with Saddam Hussein, taking the group off the U.S. terrorism list despite vehemently rejecting its claim that it is a pro-democracy opposition movement worthy of replacing Iran's Shiite regime.

In announcing the decision, the State Department said the Mujahedeen-e-Khalq hasn't committed terrorism for more than a decade and credited its 3,000 members for nearly completing the peaceful departure from their paramilitary base near Iraq's Iranian border. Effective immediately, any assets the MEK has in the United States are unblocked and Americans are permitted to do business with the organization.

A senior State Department official, however, said the administration does not regard the MEK as a viable opposition group that could promote democratic values in Iran. 

Iran's mainstream opposition groups have distanced themselves from the MEK, whose ideology stems from elements of Marxism, secularism, an obsession with martyrdom and near adoration of its leaders. A 2009 report by the security think tank RAND accuses it of fraudulent recruiting as well as "authoritarian control, confiscation of assets, sexual control (including mandatory divorce and celibacy), emotional isolation, forced labor, sleep deprivation, physical abuse and limited exit options."