Secretary of State Hillary Rodham Clinton told a House committee Wednesday that MEK’s cooperation in a relocation plan from its paramilitary base on the Iran-Iraq border “will be a key factor in any decision” on whether to take it off the U.S. list of foreign terrorist organizations. The United States will help ensure the safety and security of the camp’s residents as they are moved to another site inside Iraq, she said.

Taking the MEK off the terror list would lift U.S. economic sanctions, which prevent the group from fundraising.

The group says it renounced violence in 2001, and it has assembled an impressive roster of advocates, including former New York Mayor Rudy Giuliani and Bush administration Attorney General Michael Mukasey, FBI Director Louis Freeh and Homeland Security Secretary Tom Ridge.

Earlier this week, the MEK asked a federal appeals court to clear its name, arguing that its status was putting members long exiled in Iraq at risk. About 3,200 residents remain at Camp Ashraf, northeast of Baghdad, but are being pressured to leave by the new Iraqi government, whose Shiite officials want to build stronger ties with Iran. An Iraqi raid last year left 34 exiles dead, and the group claims its terrorist status has helped Iraqi authorities justify mistreatment of members and made it harder for residents to find permanent homes in other nations.

Clinton rejected the suggestion, saying that no country has raised the issue of the MEK’s terrorist designation with the State Department. And she backed an Iraqi relocation plan that has already taken 397 camp residents to their new, temporary home at the former U.S. Camp Liberty.

“There were complications but it was peaceful,” Clinton told lawmakers in the House Foreign Affairs Committee, several of whom have strongly pressed the MEK’s case. “There was no violence. The safety so far has been protected and we are watching that very closely.”

The closure of Ashraf remains an issue because it was the main paramilitary base for the MEK when it conducted terrorist attacks. Following the U.S. invasion of Iraq in 2003, the Americans disarmed several thousand MEK members and promised to protect them at Ashraf, but for Iraqi authorities it essentially remained a no-go zone. They’ve bristled at the MEK’s attempts to defend a sovereign zone inside Iraq, which U.S. officials say contributed to the violence.

Clinton stopped short of explicitly saying the U.S. would remove the MEK from its list in exchange for fully leaving the Ashraf camp, but her comments suggested that any other requirements for delisting have largely been met.

The MEK is deeply controversial. Critics call it a cult with an ideology mixing Marxism, secularism, an obsession with martyrdom and near adoration of its leaders; American officials have long cited its role in the murder of Americans in the 1970s and attacks that killed hundreds of Iranians.

The group helped Ayatollah Ruhollah Khomeini overthrow U.S.-backed Shah Mohammed Reza Pahlavi in Iran’s Islamic Revolution in 1979. But the MEK quickly fell out with Khomeini, and thousands of its followers were killed, imprisoned or forced into exile. It launched its campaign of assassinations and bombings against Iran’s government in retaliation.

Yet the group also has provided the Americans with intelligence on Iran and has convinced many governments that it has abandoned terrorism. The European Union removed it from its list in 2009.

The group was designated a terrorist organization in 1997 at a time when the U.S. sought warmer relations with Iran under the reformist presidency of Mohammad Khatami.

Tehran insists that the MEK continues to commit acts of violence. It claims the group has worked with Israel to kill several Iranian nuclear scientists in recent years. The MEK rejects the allegation.