The European Union says it will remove an Iranian opposition group fromits terrorist list, thus freeing the group's frozen assets. The move,announced Monday, is likely to increase tensions between Brussels andTehran.

The European Union's decision to remove the oppositiongroup, the People's Mojahedin of Iran, from its list of terroristorganizations was expected.

EU Removes Iranian Opposition Group From Terror List

EU foreign policy chief JavierSolana told reporters the EU was simply abiding by a previousresolution from the European Court of Justice. The decision is expectedto take effect Tuesday.

EU Removes Iranian Opposition Group From Terror List

The People's Mojahedin began as aleftist Islamist opposition group to the late Shah of Iran and becamethe most prominent overseas opposition movement to Iran's Islamicregime. It's armed wing was based in Iraq. It's political branch islocated outside Paris. It remains banned in the United States.

EU Removes Iranian Opposition Group From Terror List

AU.S. State Department spokesman said there is no indication the UnitedStates will change its policy toward the Iranian opposition group. Earlier this month, former Secretary of State Condoleezza Rice renewedthe People's Mojahedin's terror designation for one year.

ShadaIslam, a senior analyst at the European Policy Center in Brussels saidthe EU's decision will undoubtedly anger the Iranian government.

"TheIranians will be quite angry obviously at the European Union. They willnot like it, and I think there will be public statements of anger andpossibly outrage as well," Islam said. "I think what is not going tochange is the European Union's policy toward Iran, which is based onconstructive engagement ... and is also backed up by sanctions at theUnited Nations."

Islam said it would be in Iran's interest notto react too strongly to the EU's move on the resistance group. He alsocautioned Tehran not to burn its bridges toward the west in general,particularly given the new Obama administration in Washington, whichhas yet to clearly spell out its policy toward Iran.

Hundredsof angry demonstrators rallied in front of the French Embassy in Tehranon Sunday to protest removal of the People's Mojahedin from the EUterror list.