Germany’s government has refused to agree to a key U.S. demand to designate the entire Lebanese Islamic militia Hezbollah -- and not just a piece of it -- a terrorist organization as part of talks to rein in the nuclear program in Iran.

Two sources familiar with the U.S. talks with Germany, France and the United Kingdom over remedying defects in the Iran nuclear deal told Fox News of Berlin's stance, saying that German Chancellor Angela Merkel’s administration is the “least cooperative” of the three European powers.

Angela Merkel

German Chancellor Angela Merkel. Her administration has been called "least cooperative" of the European powers participating in discussions about potential improvements to the Iran nuclear deal. (The Associated Press)

Germany is resisting the U.S. negotiating team appeal---and President Donald Trump's position-- to outlaw all of Hezbollah because that demand, say German diplomats, is linked to Israeli-Palestinian peace talks. The sources said Germany views the Trump administration as too pro-Israel. As a result, Germany does not want to ban all of Hezbollah, specifically its “political wing,” within its territory, where 950 Hezbollah members raise funds and are recruiting members.

Hezbollah is Iran’s strategic partner in the Middle East and is said to have played a crucial role in the murders of over 500,000 people in the Syrian civil war. After a 2012 Hezbollah-organized terrorist attack in Bulgaria, in which five Israelis and a Bulgarian national were killed, the E.U. extended a ban only to the group's so-called military wing.

U.S. officials have met with European officials in London, Berlin and Paris over the last few weeks as part of efforts to improve the atomic deal with Iran, formally known as the Joint Comprehensive Plan of Action (JCPOA).

When asked about Germany’s position, a U.S. State Department spokesperson reiterated Trump’s demands from January, telling FoxNews on Monday, “They should designate Hezbollah — in its entirety — as a terrorist organization.”

“They should designate Hezbollah — in its entirety — as a terrorist organization.”

— U.S. State Department spokesperson to Fox News

The spokesperson said that “we are working closely with our European partners to address our shared concerns with the JCPOA and Iran’s malign behavior.”

The State Department official added that the U.S. has “discussed the six non-nuclear/regional issues that the president also identified and called for stronger steps from our European allies.”

In addition to proscribing Hezbollah as a whole as a terrorist entity, the spokesperson said Trump wants the Europeans to “cut off funding to the Islamic Revolutionary Guard Corps [IRGC], its militant proxies, and anyone else who contributes to Iran’s support for terrorism.”

Trump designated the IRGC a terrorist organization in October.

The spokesperson said U.S. allies should “join us in constraining Iran’s missile development and stopping its proliferation of missiles, especially to Yemen.”

European countries “should join us in countering Iran’s cyberthreats” and “should help us deter Iran’s aggression against international shipping,” the official added.

Lastly, the spokesperson said that the European powers “should pressure the Iranian regime to stop violating its citizens’ rights. And they should not do business with groups that enrich Iran’s dictatorship or fund the Revolutionary Guard and its terrorist proxies.”

Germany’s foreign policy toward Iran’s regime is widely considered to be beneficial to the ayatollahs who rule the Islamic Republic there. In March, Berlin’s ambassador to Tehran, Michael Klor-Berchtold, praised Ali Larijani, the head of Iran’s quasi-parliament, who is infamous for his denial of the Holocaust.

Writing on his ambassador-to-Tehran Twitter feed, Klor-Berchtold said in English and Persian, “Good discussion with the Speaker of Iranian Parliament, Mr. Ali Larijani.”

According to the German magazine Spiegel, Larijani engaged in Holocaust denial at the 2007 Munich security conference when he said his country had “different perspectives of the Holocaust.”
In the mass-circulation tabloid BILD, Ambassador Klor-Berchtold was declared  “loser of the day” for his meeting with Larijani and Hossein Amir-Abdollahian. BILD wrote, “No dialogue with Jew-haters.”

Amir-Abdollahian is an assistant to Larijani and the director general of international affairs for Iran’s parliament. In February, he called for the destruction of the Jewish state.

Growing economic relations between Tehran and Berlin may also be an impediment to Merkel's making concessions on the Iran nuclear deal. German exports to the Islamic Republic of Iran climbed to €3.5 billion in 2017, or about $4.3 billion, from €2.6 billion in 2016.

The U.S. spokesperson said that America "continues to have productive talks with our European partners. We have discussed the areas the president identified in January where we wants to see improvements – including ensuring Iran never comes close to a nuclear weapon and addressing our concerns with the sunset dates, taking strong action if Iran refuses IAEA [International Atomic Energy Agency] inspections, and preventing Iran from developing or testing a long-range ballistic missile.”

The spokesperson added that “the deal’s greatest flaw is that its restrictions sunset over time, leaving Iran free in the future to pursue industrial scale nuclear fuel enrichment, an important step in achieving a rapid nuclear weapons breakout capability.”

Trump announced in January that the European would have until May 12 to work with the U.S. to improve the Iran deal. If the major powers in Europe do not meet Trump’s ultimatum, the U.S. will pull out of the nuclear pact and likely reimpose sweeping economic sanctions on Iran’s clerical regime.

The State Department spokesperson said: “This is a last chance. In the absence of a commitment from our European allies to work with us to fix the deal’s flaws, the United States will not again waive sanctions in order to stay in the Iran nuclear deal. And if at any time the president judges that agreement is not within reach, the United States will withdraw from the deal immediately.”

A German foreign ministry spokeswoman told Fox News by email that Foreign Minister Heiko Maas had spoken with Israeli Prime Minister Benjamin Netanyahu about "important regional questions." The German foreign ministry declined to answer detailed questions about its alleged recalcitrant behavior during the Iran talks or any desire to punish Israel.

Benjamin Weinthal is a Berlin-based journalist and reports on human rights in the Middle East. He is a fellow at the Foundation for Defense of Democracies. Follow him on Twitter @BenWeinthal