The Bush administration announced Thursday that it is imposing sweeping new sanctions against Iran's defense ministry, its Revolutionary Guard Corps and a number of banks.
Secretary of State Condoleeza Rice, joined at a State Department news conference by Treasury Secretary Henry Paulson, said the steps the Bush administratioin is taking are designed to punish the Iranians for their support for terrorist organizations in Iraq and the Middle East, missile sales and nuclear activities.
Rice called the moves -- the harshest of this kind since the takeover of the U.S. Embassy in 1979 -- were in response to "a comprehensive policy to confront the threatening behavior of the Iranians."
But she also said that Washington remains open to "a diplomatic solution."
The announcement culminated a monthslong series of harsh statements from both sides amid public recriminations both within the administration and the Congress over Tehran's strategic intentions.
Rice on Thursday, for instance, repeated the administration's concern over statements indicating a desire in Tehran to "wipe Israel off the map."
The sanctions will cut off more than 20 Iranian entities, including individuals and companies owned or controlled by the Revolutionary Guards, from the American financial system and will likely have ripple effects throughout the international banking community.
The Quds Force, a part of the Guard Corps that Washington accuses of provided weapons, including powerful bombmaking materiel blamed for the deaths of U.S. soldiers in Iraq, and other banks will be identified as "specially designated global terrorist" groups for their activities in Afghanistan, Iraq and the Middle East, the officials said.
Rice said the new sanctions will "provide a powerful deterrent" for companies in the United States and abroad to sever business relationships with Iran.
Paulson said that Iran channels millions of dollars a year to help bankroll terrorist acts.
"It is increasingly likely that if you are doing business with Iran you are doing business with the IRGC," Paulson said, referring to Iran's Revolutionary Guard Corps.
The sanctions also cover three Iran state-owned banks, including Bank Melli.
The actions mean that any assets found in the United States belonging to the designated groups must be frozen. Americans are also forbidden from doing business with them.
Importantly, the designations also put companies outside the United States on notice that doing business with the designated groups could be problematic.