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story.lead_photo.caption A Sayyad 2 missile is fired by the Talash air defense system during drills Monday in an undisclosed location in Iran.

ISTANBUL -- Iran's military forces staged war exercises and its president defiantly vowed Monday to "break" U.S. sanctions on oil sales that were reimposed at midnight, as Tehran resisted a pressure campaign by President Donald Trump's administration aimed at isolating the country economically.

"We will proudly break the sanctions," Iran President Hassan Rouhani said during a meeting of government officials in the Iranian capital.

Rouhani's vow to keep exporting oil came as the Trump administration reinstated sanctions on more than 700 individuals and companies that received sanctions relief when a 2015 nuclear deal took effect.

The unilateral sanctions reintroduce some of the most crippling restrictions on Iran's oil, shipping and banking sectors and seek to penalize even non-U.S. entities that do business with Iran.

"We have to make Americans understand that they cannot talk to the great Iranian nation with the language of pressure and sanctions," Rouhani said Monday in televised remarks. He spoke to a conference of economists, who he said were at the "forefront of the resistance" against the United States.

Iran's national oil company has started selling crude oil to private companies who then can sell to anonymous buyers abroad as a means to get around the sanctions.

"We are in an economic war situation. We are standing up to a bullying enemy," Rouhani said, invoking Iran's 1980s war with Iraqi dictator Saddam Hussein. "Yesterday, Saddam was in front us; today Trump is front of us. There is no difference. We must resist and win."

"What the Americans are doing today is putting pressure merely on the people," he said, according to a transcript of the remarks posted on the president's website.

Also Monday, Iran's military and its powerful Revolutionary Guard Corps staged joint war drills in the northern and western parts of the country, the official Islamic Republic News Agency said. The exercises include air defense systems and anti-aircraft batteries.

As Iranian officials struck a martial tone, the strain could be felt on the streets of Tehran. It lurked in shops emptied by the country's rapidly depreciating currency. It could be felt in the lines at currency exchange shops. And it could be heard in the stress of the voices of people struggling to buy medicine.

"When the dollar rate went up, prices for medicine went up by 80 percent," said a man who identified himself only as Amidi, who has a mental illness and has a son with cancer. "I can't buy my own medicine anymore. I haven't taken my medicine for two months, because I can't afford it."

One man, a 45-year-old manual laborer, said in a telephone interview that low salaries and high inflation mean that his family "cannot travel even to our own villages" anymore to visit relatives. He spoke on the condition of anonymity out of fear of government reprisal.

"I work two shifts now, including the weekends, and we buy whatever we can afford without worrying about the quality," he said.

Iran's national currency, the rial, now trades at 150,000 to 1 U.S. dollar; a year ago, it was about 40,500 to $1. The economic chaos sparked mass anti-government protests at the end of last year, resulting in nearly 5,000 reported arrests and at least 25 people being killed. Sporadic demonstrations still continue.

Another resident, a 30-year-old woman who works at a private distribution company, said by phone that she pays exorbitant amounts for prescription medicine for her parents on the black market.

"Many products cannot be found [on the market] anymore," she said. The woman, a marketing supervisor, also declined to give her name so she could speak freely about conditions in Iran.

Neither Iran nor the United States "wants the best for the Iranian people," she said. "So I don't have any hope."

"Sanctions are only bad for people," she said. "We have seen this in the past."

OIL TARGETED

Secretary of State Mike Pompeo and other administration officials have described the penalties as the "toughest sanctions ever placed" on Iran. While the sheer number of people and entities sanctioned is larger than ever, many Middle East experts believe the penalties will be less effective than the United Nations sanctions in place before the deal. That is because virtually every country in the world was behind the previous sanctions, while all but a handful of nations oppose their reimposition.

The most significant of the new measures is a prohibition against oil and gas sales, which provide the Iranian government with 80 percent of its total revenue and are a crucial source of hard currency. Pompeo told journalists in Washington that the sanctions already had cost Iran the sale of over 1 million barrels of crude oil a day.

"Our objective is to starve the Iranian regime of the revenue it uses to fund violent and destabilizing activities throughout the Middle East and, indeed, around the world," Pompeo said. "The Iranian regime has a choice: It can either do a 180-degree turn from its outlawed course of action and act like a normal country, or it can see its economy crumble."

The blacklisted companies include 50 Iranian banks, an Iranian airline and dozens of its planes, as well as officials and vessels in Iran's shipping and energy sectors.

Trump withdrew from the 2015 nuclear deal in May and gave nations and businesses 180 days to wind down their oil purchases to "zero." The administration has granted waivers to eight countries that have reduced their oil purchases from Iran but have not stopped them entirely.

The countries allowed to keep buying oil from Iran temporarily under the sanctions include China and India, Pompeo announced Monday. Also granted waivers were Italy, Greece, Japan, South Korea, Turkey and Taiwan.

In addition, Pompeo said the United States has granted waivers to continue three nonproliferation projects that provide oversight on Iran's nuclear program. The only one he identified was in Bushehr, where Russia is building a second unit at an existing nuclear power plant.

The administration of Trump, who campaigned on a promise of tearing up the nuclear deal, insists it does not seek "regime change" in Iran through the sanctions. It says it wants Iran to radically change its policies, including its support for regional militant groups and its development of long-range ballistic missiles.

However, Trump's personal lawyer Rudy Giuliani and his national security adviser John Bolton both have given speeches advocating overthrowing Iran's theocratic government.

EUROPEANS' STANCE

Since May, Europeans have said repeatedly that they want to preserve the nuclear deal and have focused their diplomatic efforts on keeping trade alive with Iran however possible.

European Union members including Britain, France and Germany have said they will continue to abide by the nuclear deal, as have China and Russia. They are trying to keep Iran in compliance, too, by countering the U.S. economic sanctions.

In August, the European Commission revamped its Blocking Statute, a 1995 law designed to help European companies and banks recover damages arising from U.S. sanctions on third parties. The legislation also implies that European courts could nullify U.S. decisions regarding sanctions.

However, many European companies with a U.S. presence remain cautious about those European tools, whose effectiveness has yet to be tested.

Realistically, European officials say, they may be able to preserve only 20 percent to 30 percent of existing trade with Iran, given that large European companies with ties to the United States have already pulled out of Iran or are in the process of doing so to avoid the sanctions. Stefano Stefanini, a consultant and former Italian diplomat based in Brussels, said that the European officials think 40 percent would be optimistic.

Their stance has become only more complicated by Denmark's recent accusation that the Iranian government tried to assassinate an Arab separatist living there. France has made a similar accusation.

Reacting on Twitter, Iranian Foreign Minister Mohammad Javad Zarif said that "U.S. bullying is backfiring." He added: "The U.S. - & not Iran - is isolated."

Gholamali Khoshroo, Iran's U.N. ambassador, accused the U.S. of "brazenly and boldly" violating a U.N. Security Council resolution that unanimously endorsed the nuclear deal by reimposing sanctions, and he called for "a collective response by the international community."

Chinese Foreign Ministry spokesman Hua Chunying said China regretted the U.S. decision, adding that the accord "should be comprehensively and effectively implemented" despite the fact that the United States pulled out of it in May.

Israeli Prime Minister Benjamin Netanyahu, a longtime foe of Iran, lauded the sanctions as "historic," saying they will "strangle" what he described as Iranian state-sponsored terrorism. Defense Minister Avigdor Lieberman tweeted that the U.S. decision to restore sanctions "is the sea change the Middle East has been waiting for."

In withdrawing from the nuclear deal, the Trump administration complained that it did not go far enough in restricting Iran's nuclear program and did not cover other activities it finds objectionable.

Under the deal, Iran curbed its atomic energy program in exchange for broad relief from nuclear-related sanctions. Iran has complied with the terms of the nuclear deal, according to the International Atomic Energy Agency, the United Nations' nuclear watchdog tasked with monitoring the country's nuclear activity.

But the Trump administration demands that Iran change its "malign behavior" in the region, including ballistic missile development and support for regional proxies.

Information for this article was contributed by Erin Cunningham, Carol Morello, James McCauley and Quentin Aries of The Washington Post; by Nasser Karimi, Jon Gambrell, Matthew Lee, Tia Goldenberg, Edith M. Lederer, Amir Vahdat and Mehdi Fattahi of The Associated Press; and by Steven Erlanger of The New York Times.

A Section on 11/06/2018

Print Headline: Standing up to 'bullying enemy,' Iranian says

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