The Trump administration Monday designated Iran's Revolutionary Guards Corps a foreign terrorist organization in a move that reflects Washington's increasingly aggressive stance toward Tehran and could have implications for the safety of American soldiers stationed in the Middle East.

It is the first time the U.S. has formally labelled another country’s military a terrorist group. The action follows a months-long escalation of Washington's rhetoric against the Islamic Republic after President Donald Trump withdrew the U.S. from the 2015 Iran nuclear accord last year and reimposed sanctions that crippled its economy.

The move is intended to put pressure on the financial assets of Iran's Revolutionary Guards Corps, or IRGC, a powerful security organization founded in the aftermath of Iran's 1979 Islamic Revolution. It has a vast political and economic power base that extends to Iran's armed forces, as well as its strategic industries from oil to agriculture.

The IRGC also presides over Iran's ballistic missiles and nuclear programs.

"This action sends a clear message to Tehran that its support for terrorism has serious consequences," Trump said in a statement released by the White House.

The designation imposes sanctions on assets Iran's Revolutionary Guard Corps may have in U.S. jurisdictions and a ban on Americans doing business with it. It also presents a new risk for foreign businesses around the world that engage in any transactions withe IRGC.

"It’s absolutely the case that the IRGC amounts to a significant piece of the Iranian economy through pure kleptocracy," Secretary of State Pompeo told reporters in announcing Monday's decision.

State Department officials said banks and businesses in Europe and elsewhere could now be subject to possible criminal prosecution under U.S. terrorism laws if they have dealings with the IRGC. He noted that providing material support for a designated foreign terrorist group carries a 20-year maximum sentence under U.S. law.

"The point of this designation is to render the IRGC radioactive," said Nathan Sales, who leads the State Department’s Counterterrorism Bureau. "So all businesses, all foreign officials who are thinking about engaging with the IRGC should think long and hard about whether that makes sense."

Pompeo and John Bolton, Trump’s national security adviser, are Iran hawks who prior to joining the president's inner circle long called for regime change in Iran, which they blame for most of the problems in the Middle East.

Pompeo said Monday the administration was taking this unprecedented step because "the Iranian regime’s use of terrorism as a tool of state craft makes it fundamentally different from any other government."

He said the designation would take effect in one week.

Designating the IRGC a terror group has been rumored for years because of its support for militant groups from Lebanon to Syria. Washington has accused the IRGC of carrying out attacks on the U.S. and its allies across the Middle East.

Britain, China, France, Germany and Russia have remained in the nuclear deal with Iran, which tightly restricted Tehran’s nuclear ambitions in return for ending sanctions.

The Trump administration has demanded other signatories to the nuclear accord exit the deal. But those countries have largely ignored U.S. demands and sought ways to keep open trade and financial dealings with Iran despite the renewed U.S. sanctions.

More:Pence: Europe must withdraw from Iran nuclear deal

Javad Zarif, Iran's foreign minster, took to Twitter to call the terror designation, "A(nother) dangerous U.S. misadventure in the region."

He said also that it appeared timed to help the Tuesday re-election prospects of Israel Prime Minister Benjamin Netanyahu, a close ally of Trump's.

"A(nother) misguided election-eve gift to Netanyahu," Zarif said.

Iran is Israel's arch-enemy.

"Thank you, President @realDonaldTrump for your decision to designate the Islamic revolutionary guards as a terrorist organization. Once again you are keeping the world safe from Iran aggression and terrorism," Netanyahu wrote on Twitter.

Over the weekend, Iran said that if the IRGC was branded a terror organization it would consider placing the U.S. military on a terror list of its own, raising questions about whether the move will further endanger U.S. military personnel.

"We will put (the U.S.) on the terror blacklist next to Daesh," Heshmatollah Falahatpisheh, the head of the Iranian parliament’s national security committee, said Saturday on Twitter, using the Arabic acronym for the Islamic State group.

Pompeo said the Trump administration has warned Iran against any military action against U.S. armed forces. "We have made clear both publicly and privately that an attack of the United States of America is something that they ought to think more than twice about,” he said.

Sales said the U.S. is prepared for retaliation from the Iranian regime but declined to elaborate.

The action also potentially complicates Iran-U.S. diplomacy.

Unless there are exclusions or waivers, U.S. troops and diplomats could be barred from contact with Iraqi or Lebanese authorities who act as intermediaries. State Department officials declined to say whether there were any exemptions in the designation but insisted that U.S. diplomacy – including any efforts to secure the release of American hostages in Iran – would not be affected.

The U.S. Department of Treasury previously blacklisted Iranian entities and people for their affiliations with the IRGC. The group as a whole has not been described this way.

"A formal designation and its consequences may be new, but these IRGC butchers have been terrorists for a long time," said Sen. Ben Sasse (R-Neb.). "This (is) an important step in our maximum-pressure campaign against Iran, the largest state-sponsor of terror and the biggest chaos agent inside the Middle East."

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