The Covert Iran Plan

May 29 -- The Pentagon is considering a massive covert action program to overthrow Iran's ruling ayatollahs as the only way to stop the country's nuclear weapons ambitions, senior State Department and Pentagon officials told ABCNEWS.

The proposal, which would include covert sponsorship of a group currently deemed terrorist by the U.S. government, is not new, and has not won favor with enough top officials to be acted upon.

But sources say it is a viable option that is getting a new look as the administration ramps up its rhetoric against Iran, and it is likely to be one of the top items on the agenda as high-level U.S. policymakers meet today to discuss how to deal with the Islamic republic.

The proposal, sources say, includes using all available points of pressure on the Iranian regime, including backing armed Iranian dissidents and employing the services of the Mujahedeen e Khalq, a group currently branded as terrorist by the United States.

The MEK, which had been primarily supported by Iraq and was responsible for numerous attacks inside Iran, agreed after the Iraq war to a cease-fire with U.S. forces. And, as the State Department insisted and the White House concurred, the group agreed to disarm, but their forces are still in place and their weapons are in storage.

Sources said Pentagon officials specifically set aside a proposal to reconstitute the MEK under a different banner and promote their armed incursions into Iran, much as the MEK had been doing under Saddam.

The Pentagon officials argue that the MEK is disciplined, well-trained, and an effective lever against the ayatollahs, and could be renamed and placed under American clandestine guidance.

According to sources, the office of Doug Feith, undersecretary for policy at the Department of Defense, argued that the MEK has not targeted Americans since the 1970s, which is true, and was only put on the terrorist list by the Clinton administration as a gesture to improve relations with Iran.

The State Department argument was that MEK is on the terrorist list and any failure to disarm it would be an act of hypocrisy, which was the same line taken by the Iranians in confidential meetings that have been ongoing in Geneva, until the United States recently cut them off, sources said.