Iran declared the United States a "state sponsor of terrorism" and its forces in the region "terror groups" in a tit-for-tat response to a similar U.S. move on Monday.
The Supreme National Security Council said its decision came after the U.S. designated Iran's Islamic Revolutionary Guard Corps (IRGC) a "terrorist organization."
In a statement carried by the official news agency IRNA, it slammed Washington's move as an "illegal and foolish act."
In return, it "declares that it considers the regime of the U.S. a 'state sponsor of terrorism' and 'the Central Command of America, known as CENTCOM' and all forces related to it 'terrorist groups'," the statement said.
"The IRGC unlike America and its regional allies who have always supported extremist and terrorist groups in West Asia region, have always been in the frontline of fighting terrorism and extremism in the region," the council added.
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Part of America's vast military presence around the globe, CENTCOM's area of command covers multiple war zones and hotspots including Afghanistan, Iraq, Syria, Yemen and the Gulf.
Iran's top diplomat Mohammad Javad Zarif had earlier urged President Hassan Rouhani to place CENTCOM forces on Teheran's list of terror groups, his ministry said.
Zarif blasted the U.S. move on Twitter, saying it was timed to support Israeli Prime Minister Benjamin Netanyahu ahead of Tuesday's parliamentary election in the Jewish state.
"A(nother) misguided election-eve gift to Netanyahu. A(nother) dangerous U.S. misadventure in the region," he wrote.
The latest has it that Iranian President defended the IRGC as protectors of the Islamic republic.
"The Guards have sacrificed their lives to protect our people, our (1979 Islamic) revolution," Rouhani said in a live speech broadcast live on state TV.
U.S. President Donald Trump said the "unprecedented" move "recognizes the reality that Iran is not only a State Sponsor of Terrorism but that the IRGC actively participates in, finances and promotes terrorism as a tool of statecraft." "The IRGC is the Iranian government's primary means of directing and implementing its global terrorist campaign," Trump said in a statement.
It is the first time the United States has applied the designation to part of a foreign government, rather than guerrilla groups or other informal entities.
The move follows Trump's decision to pull the United States out of a multilateral deal with Iran that was meant to lift crippling economic sanctions in return curbs on Tehran's nuclear program.
Iran's Supreme Leader Ayatollah Ali Khamenei rejected Washington's designation of the IRGC as a foreign terrorist organization, saying on Tuesday the Guards had confronted enemies at home and abroad, state TV reported.
"Our Sepah (the IRGC) is in the frontline of confronting enemies of our (1979 Islamic) revolution and has always defended the country ... America has failed to block our advancements," Khamenei told a group of members of the Guards.
Responding to the rising tensions between the U.S. and Iran, the Chinese Foreign Ministry urged relevant parties to work towards maintaining peace and stability in the Middle East.