Iran on Saturday criticized a US government move to seize a Manhattan skyscraper owned largely by a foundation that promotes its language and Islamic culture, saying this violated the right to religious freedom in the United States.

According to a court document filed in New York on Thursday, the US Department of Justice agreed to distribute proceeds from the sale of the Fifth Avenue high-rise to families affected by alleged Iranian-aided attacks, including the 1983 bombing of the US Marine barracks in Beirut.

The settlement marks the latest turn in a long-running battle over the 36-storey building owned chiefly by Alavi Foundation, a non-profit Persian and Islamic cultural center.

Iran's foreign ministry spokeswoman Marzieh Afkham said the decision "lacks legal justification and negates America's commitment to protecting its citizens' religious freedom."