US looks to sanctions on Iran's Quds force

WASHINGTON, Sep 12 (Reuters) The Bush administration is looking at slapping sanctions on a unit of Iran's Revolutionary Guard Corps but has decided against naming the entire body a terrorist group, senior US officials said on Wednesday.

With some allies' support fading for tougher UN sanctions against Tehran over its nuclear program, Washington plans more unilateral measures to pressure Iran, including sanctions on the Guards' Quds force, blamed for stoking violence in Iraq.

''The important thing is to send a signal that we are even more impatient and more disappointed. That requires stronger language and additional measures,'' said a senior US official, who declined to be named as the issue is sensitive.

Last month, plans were leaked to US media of the Bush administration's intent to label the entire Guard Corps a foreign terrorist group -- the first time the United States would place the armed forces of any sovereign government on its list of terrorist organizations.

Such a designation enables Washington to target the Iranian group's finances.

US officials said Secretary of State Condoleezza Rice was furious over the leak, which one diplomat said was seen as a deliberate attempt by hawks in the administration to push the State Department to take firmer action against Iran.

Several senior US officials said a decision had been made not to label the entire Guard Corps a terrorist group, partly because some of Washington's allies disagreed with the move and also because of the legalities involved.

The thinking was now to impose strong financial measures against the Quds without calling it a terrorist group.

Washington blames the Quds force for inciting violence in Iraq and allowing the flow of weapons to its neighbor.

''There is no consideration being given at present to designating the entire (Guard). The issue is the Quds,'' said a senior US official.

Senior State Department official David Satterfield, who declined to give details of future punitive US actions against Iran, said Washington was very concerned about the behavior of the Quds and its parent body, the Guard Corps.

''We are intent upon doing what we can to address these behaviors and we will take whatever steps we believe will be appropriate and effective to reduce the ability of these groups to continue these activities,'' added Satterfield, the State Department's Iraq coordinator.

FRUSTRATION WITH ALLIES A Western diplomat said the harder line being taken by Washington reflected frustration not only with Tehran but also with some allies, notably Germany, for a reluctance to move ahead quickly with a third round of U.N. sanctions against Iran. China and Russia also oppose more sanctions.

The diplomat said lower-level German officials told the United States during a meeting in Berlin last week, along with other major powers, that it could not support more sanctions.

Part of the argument was to see how a deal played out between the UN.'s nuclear watchdog and Iran, which is aimed at bringing about more transparency to Iran's nuclear program.

However, German Embassy spokesman in Washington Ulrich Sante disputed that Germany did not support US plans for another U.N. sanctions resolution against Iran.

Major powers, including Germany, are expected to gather in Washington on September 21 to discuss the possible broadening of UN sanctions against Iran.

''We're confident we're going to be able to move forward, get a new Security Council resolution that includes new sanctions,'' said State Department spokesman Sean McCormack.

Iran experts say war drums appear to be beating louder in the administration for military action against Tehran for refusing to give up its nuclear program.

''Even among those who might advocate the military option, I think there are probably very few who believe that dropping a bomb on Iran is going to have a positive outcome,'' said Iran expert Karim Sadjadpour of the Carnegie Endowment for International Peace.

Asked whether serious discussions were taking place for a possible military strike against Iran, McCormack said the United States was still on a ''diplomatic course.'' Reuters SZ VP0252