Iran has pulled members of a special forces unit stationed in Syria, the Sunday Times reported, in response to mounting criticism of the cost of Tehran's involvement in the uprising against Syrian President Bashar Assad.
Tehran's Grand Bazaar reopened under close police supervision on Saturday, traders said, days after it was shut by clashes between riot police and protesters blaming the government for the collapse of the Iranian currency.
On Wednesday, riot police fired tear gas, fought demonstrators and arrested money changers in and around the bazaar. President Mahmoud Ahmadinejad blamed speculators for the rial's slide, which is eating into living standards and destroying jobs in the industrial sector.
On Sunday, the Times reported that, amid protests, Iran has withdrawn 275 members of Unit 400, part of the Revolutionary Guard's elite Quds Force, which had reportedly assisted Assad's troops in the fight against opposition forces.
The Sunday Times report cited western intelligence officials as indicating that the fighters were flown out of Syria last week, adding that the report was confirmed by a relative of a member of the Unit 400.
U.S. lawmakers on Saturday indicated that they were considering expanding American economic sanctions on Iran - measures that already have helped push that country's currency into free fall but have not yet convinced Tehran to abandon its nuclear program.
Iran's economy has been badly hit by U.S. and European sanctions imposed to try to pressure the Iranian leadership to stop pursuing nuclear weapons. The Iranian rial lost a third of its value against the dollar in the past 10 days and as much as 80 percent since the beginning of the year.
Democratic Senator Robert Menendez, a member of the Senate Banking and Foreign Relations Committee, said he plans to push for new penalties on foreign banks that handle any significant transactions with the central bank of Iran. Only oil-related transactions are now covered by sanctions.
A senior House of Representatives Democrat, Howard Berman, is working on additional possible sanctions on Iran.
Menendez said he is also looking at ways to freeze an estimated 30 percent of Iran's foreign currency reserves held in banks outside the country.
"It seems to me we have to completely exhaust all the tools in our sanctions arsenal, and do so quickly, before Iran finds a way to navigate out of its current crisis," Menendez said in an interview.
Iran says its nuclear program is for peaceful purposes.
The U.S. Congress is out of session until after the November 6 presidential election, meaning any action on fresh sanctions will have to wait until then.
Menendez said he hopes the additional sanctions will become part of an annual defense policy bill that the Senate and House must finalize after the election.
An aide to Berman said the congressman - the top Democrat on the House Committee on Foreign Affairs - is working on measures similar to the Menendez proposal. The Senate is controlled by Democrats and the House by Republicans.
In Britain on Friday, U.S. Treasury Department official David Cohen said Iran has the ability to "relieve the pressure its people are feeling" by resolving concerns over its nuclear work. He blamed the rial's plunge on Iran's own economic mismanagement as well as sanctions.
The White House had no immediate comment on possible new sanctions.
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