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Given the MEK's dreadful human rights record and US support for human rights in Iran, delisting could make the US look hypocritical but in combination with other steps it could also advance US-Iran relations.

Guardian
The US state department is considering whether to remove Iranian opposition movement Mujahedin-e-Khalq (MEK) from its terrorist list. The MEK has already been taken off the EU's terrorist list, and in the US the group is generally treated as if it were not listed.
Opponents of delisting rightly remind us that the MEK has been involved in acts of violence against Americans, Iranians and even its own members, and that the group is a cult-like and anti-democratic force. Founding members of the MEK murdered several Americans in Iran in the 1970s, and the group actively supported taking Americans hostage in Tehran in 1980.
The MEK supported Saddam Hussein's war against Iran in 1980. That war, in which Iraq also used chemical weapons, left some 500,000 Iranians dead and maimed, destroyed about 120 Iranian cities and towns, and caused close to $120bn in economic damage. The MEK also helped Saddam suppress the Kurdish rebellion in 1991 following the first US war with Iraq.
It is no wonder that the MEK is despised in both the US and Iran. It is a terrorist group to the Americans, a monafegh ("hypocritically Muslim") group to the Islamic Republic, and a khaen ("traitor") group to most Iranians. Former members of the MEK have charged that it forbids internal democracy and treats members critical of the group's activities quite savagely.
While the MEK is building support among western officials, it is still censured by most Iranians. This was not the case in its formative years in the 1970s when the guerilla group was considered heroic by young Iranians challenging the dictatorship of the shah and American domination. The original MEK included Islamists and Marxists; before long they split violently and the Islamists took over.
The MEK's conversion from a loyalist to a traitor group began in 1979 when it parted with the Islamic Republic, murdered state officials - including a president and a prime minister - and joined Saddam. Ever since those early blows, a tragically vicious cycle of violence has continued between the Islamic Republic and the MEK, resulting in several thousand deaths.
Opponents of delisting believe the group may never become democratic or even pragmatic. However, it is ridiculous to assert, as many of them do, that removing the MEK from the US terrorist list will strengthen the Islamic regime, demoralise Iranian reformers, threaten the freedom of Iranian-Americans and give the MEK the power to impose a US war on Iran.
Delisting the MEK might even be a step in the right direction. As far as the Iranian people are concerned, the MEK has long been a source of extremism, violence and fear but delisting could have a moderating effect. A delisted MEK will have to transform itself from a paramilitary into a political group. If this were to happen, the Iranians would be relieved.
By delisting the MEK the US will lose a useless bogeyman, but gain a redundant anti-Iran propaganda machine. This will not result in a better policy towards Iran unless the delisted MEK is put on a tight leash. This must begin by demilitarising the MEK, which will help to resolve the humanitarian crisis in Camp Ashraf in Iraq where some 3,400 people reside, including children.
Given the MEK's dreadful human rights record and US support for human rights in Iran, delisting could make the US look hypocritical but in combination with other steps it could also advance US-Iran relations.
To achieve that, the US would also have to renounce regime change and the use of force, while incrementally lifting sanctions and easing Iran's security concerns. In return, Iran must gradually address American/IAEA's nuclear concerns. The ball is in the US court of goodwill.

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