Iran on Monday strongly condemned a decision by the European Union to remove an Iranian opposition group from its terror list and lift restrictions on its funds, saying the move encourages terrorism.

Iran's Foreign Ministry said the hands of the People's Mujahedeen Organization of Iran "are stained with the blood of thousands of Iranian and non-Iranian people" and the EU decision demonstrated what it called the bloc's "double standards" in dealing with terrorism.

Monday's decision by the foreign ministers of the 27 EU nations means that as of Tuesday the assets of the group will be unfrozen. It is the first time an organization has been "de-listed" by the EU.

The EU decision is sure to further damage relations with Tehran already strained over Iran's nuclear program.

"The Islamic Republic of Iran strongly condemns the EU's unacceptable move and deeply deplores that the EU, in order to attain illegitimate and short-term political objectives, has distanced itself from the path of the international community in fighting terror and has chosen friendship and cooperation with terrorists," state television quoted the ministry statement as saying Monday.

The statement said the People's Mujahedeen — known as Monafeqin, or Hypocrites, in Iran — has never renounced violence, never given up its arms and has continued to resort to terrorism.

The group had been blacklisted as a terror organization by the EU since 2002, but waged a long legal battle in the EU's court of justice to reverse that decision. Several EU court decisions went in the group's favor, concluding that the EU had failed to properly explain why it froze the assets of the group.

The group, however, remains on the United States terror list. It was blacklisted by Washington in 1997.

The People's Mujahedeen, also known as the Mujahedeen-e-Khalq, is the military wing of the National Council of Resistance of Iran, which is based in Paris. The council said it is dedicated to a democratic, secular government in Iran.

However, it has maintained a camp of disarmed fighters in Iraq, north of Baghdad.

The EU decision comes three days after Iraqi National security adviser Mouwaffak al-Rubaie said his government's decision to close Camp Ashraf for members of the People's Mujuhedeen was "irreversible" because Iraqi authorities do not tolerate anti-Iranian activities on their soil.

Al-Rubaie said members of the group will be given the option of going back to Iran or going to a third country. He said 914 of some 3,500 members of the group who have non-Iraqi passports with families in foreign countries will be allowed to move to those countries.

The People's Mujahedeen has claimed responsibility for dozens of bombings that have killed hundreds of people and government officials in the 1980s.