US slaps sanctions as Iran marks 1979 embassy siege

Still-raw tensions flared anew Monday on the 40th anniversary of Iranian zealots' storming of the US embassy, with thousands in Tehran taking to the streets and Washington slapping fresh sanctions.

Four decades to the day after revolutionary students raided the embassy and seized dozens of US diplomats and security staff, demonstrators in Tehran and several other cities shouted anti-American slogans and flaunted effigies mocking President Donald Trump.

The hostage-taking - brought to Americans' living rooms for 444 days in one of the first global crises televised in near real-time - still haunts relations between the two former allies which have never re-established diplomatic relations.

Secretary of State Mike Pompeo pointed to the embassy siege as the United States announced sanctions against nine aides to Ayatollah Ali Khamenei, Iran's supreme leader under the Islamic republic established by the revolution.

"Forty years later, the revolutionary regime in Tehran has proven, time and again, that its first acts after gaining power were a clear indication of its evil character," Secretary of State Mike Pompeo said in a statement.

Read more: Iranian student leader 'regrets' 1979 US embassy takeover, 444-day hostage crisis that destroyed relations

The Treasury Department said it was imposing the sanctions - which criminalise financial transactions by anyone in the United States - over "repression" at home and the export of "terrorism" overseas.

The targeted individuals include a number of prominent Iranians, among them judiciary chief Ebrahim Raisi and Ali Akbar Velayati, a senior foreign policy advisor to Khamenei.

Velayati, who served as Iran's foreign minister from 1981-1997, is wanted in Argentina in connection with the 1994 bombing of a Jewish centre blamed on Hezbollah, the Lebanese Shia militant group with close ties to Tehran.

The United States said it was also offering a $20 million reward for information to find Robert Levinson, a former FBI agent and CIA contractor who went missing in Iran in 2007 in mysterious circumstances.

New steps on uranium

In a speech, the head of the army, General Abdolrahim Mousavi, denounced the idea of interaction with the United States as a ruse - echoing recent remarks by Khamenei after Trump said he was open to dialogue.

"They will continue their enmity against us. They are like a lethal scorpion whose nature is to have a poisonous sting," Mousavi said.

"We are ready to crush this scorpion and will also pay the price," he said.

Trump withdrew last year from a nuclear accord negotiated by his predecessor Barack Obama that had raised the possibility of US reconciliation with a country where most of the population was born after 1979.

Trump instead slapped sweeping sanctions, including trying to end all Iranian oil exports.

On Monday, Iran announced its latest action meant to defy but not kill the 2015 nuclear agreement, which is still backed by European powers.

Iran has increased enriched uranium production to 11 pounds (five kilograms) a day, more than tenfold the amount from two months ago, and has developed two new advanced centrifuges, said Ali Akbar Salehi, the head of the Atomic Energy Organisation of Iran.

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