“Iran: Iran remained the most active state sponsor of terrorism in 2001. Iran's Islamic Revolutionary Guard Corps (IRGC) and Ministry of Intelligence and Security (MOIS) continued to be involved in the planning and support of terrorist acts and supported a variety of groups that use terrorism to pursue their goals. Although some within Iran would like to end this support, hardliners who hold the reins of power continue to thwart any efforts to moderate these policies. Since the outbreak of the intifadah, support has intensified for Palestinian groups that use violence against Israel. During the past year, however, Iran appears to have reduced its involvement in other forms of terrorist activity. There is no evidence of Iranian sponsorship or foreknowledge of the September 11 attacks in the United States. President Khatami condemned the attacks and offered condolences to the American people.

During 2001, Iran sought a high-profile role in encouraging anti-Israeli activity by way of increasing its support for anti-Israeli terrorist groups. Supreme Leader Khamenei continued to refer to Israel as a "cancerous tumor" that must be removed. Matching this rhetoric with action, Iran continued to provide Lebanese Hizballah and the Palestinian rejectionist groups -- notably HAMAS, the Palestine Islamic Jihad, and the PFLP-GC -- with varying amounts of funding, safe haven, training, and weapons. It also encouraged Hizballah and the rejectionist Palestinian groups to coordinate their planning and to escalate their activities.
In addition, Iran provided limited support to terrorist groups in the Gulf, Africa, Turkey, and Central Asia. This support is at a considerably lower level than that provided to the groups opposed to Israel and has been decreasing in recent years. The Iranian Government took no direct action in 2001 to implement Ayatollah Khomeini's fatwa against Salman Rushdie, but the decree has not been revoked nor has the $2.8 million bounty for his death been withdrawn. Moreover, on the anniversary of the fatwa in February, some hard-line Iranians stressed again that the decree is irrevocable and should be carried out.

During Operation Enduring Freedom, Tehran informed the United States that, in the event U.S. warplanes went down inside Iran, Iranian forces would assist downed aircrews in accordance with international convention. Iran also worked with the United States and its allies at the Bonn Conference in late 2001 to help in the formation of the Afghan Interim Authority. Tehran pledged to close its borders with Afghanistan and Pakistan to prevent the infiltration of Taliban and al-Qaida escapees. There are, however, reports that Arab Afghans, including al-Qaida members, used Iran as a transit route to enter and leave from Afghanistan.”