Iran condemned on Saturday the Obama administration for taking an Iranian militant group formerly allied with Saddam Hussein off the U.S. terrorism list, saying it shows Washington's "double standards."

The Mujahedeen-e-Khalq (MEK), which began as a guerrilla movement fighting Shah Mohammed Reza Pahlavi, helped overthrow the monarch in 1979 then quickly fell out with the Islamic Republic's first leader, Ayatollah Ruhollah Khomeini. It fought in the 1980s alongside Saddam's forces in the eight-year Iran-Iraq war but disarmed after the U.S. invasion of Iraq in 2003.

The State Department delisted the group on Friday, meaning that any assets the MEK has in the United States are unblocked and Americans can do business with the organization. On Saturday, at their Paris headquarters, MEK members gathered to celebrate, tossing flower petals and displaying photos of members killed in the past 15 years.

"We call on the international community to respect the will of the Iranian people for a regime change in Iran," Maryam Rajavi, the Paris-based head of the exiled opposition group, said Saturday.

Iranian State TV criticized the decision, saying that the U.S. considered the MEK "good terrorists" and claims Washington is using the group to work against Tehran. State radio said the move highlights President Barack Obama's anti-Iranian sentiments.

"There is much evidence of the group being involved in terrorist activities. Delisting them shows America's double standard policy on terrorism," state TV said. The U.S. distinguishes between "good and bad terrorists" and the MEK are now "good terrorists because the U.S. is using them against Iran," the report also said, adding that Washington and Israel use the group to spy on Iran's nuclear program.

The U.S. and its allies accuse Iran of using its civilian nuclear program as a cover to develop nuclear weapons. Iran has denied the claims, saying the program is peaceful and is intended for electricity generation and scientific research.

The State Department said the MEK hasn't committed terror for more than a decade. The group has also complied with demands that over 3,000 of its once-armed members abandon their base in Iraq near the Iranian border for a camp outside Baghdad, an essential step to ending their decades-long presence in Iraq.

The group claims it is seeking regime change through peaceful means, aiming to replace Tehran's clerical system with a secular government.

However, a senior State Department official suggested that removing MEK from the U.S. terrorist list does not translate into a shared common front against the Islamic Republic. The official said Washington does not view MEK as an opposition movement that can promote democratic values in Iran. The official on Friday briefed reporters on condition of anonymity because he wasn't authorized to speak publicly on the matter.

In a rare interview on Friday, Rajavi said "the most important impact ... will be seen inside Iran."

"The balance of power is going to change. For example, the first message for the Iranian people will be they won't fear increasing their activity and increasing their demonstrations," she said. The fear "will evaporate ... and that will lead to the expansion of anti-regime activities within Iran."

Iran says MEK is responsible for the deaths of more than 12,000 Iranians over the past three decades, including senior government officials.

The MEK spent huge sums of money over years lobbying for removal from the U.S. terror list, holding rallies in European capitals and elsewhere that featured luminaries like former Homeland Security Secretary Tom Ridge from the administration of George W. Bush. Former House Speaker and presidential candidate Newt Gingrich was among those recently welcomed by the MEK to Paris.

The group was protected in Iraq under Saddam Hussein, but its members are disliked by the new Iraqi government, dominated by Shiite Muslims like those in Iran.

The United States had insisted the MEK's members leave Camp Ashraf, their home in Iraq, as a condition for removal from the terrorist list. All but several hundred militants are now located in Camp Liberty, a former U.S. base outside Baghdad, looking for placement in third countries.

The MEK was removed from the European Union's terrorist list in 2009.