Iran has developed a missile that can penetrate the armor of an Israeli-made Merkava tank and a US-made Abrams tank, the commander of the Iranian Revolutionary Guard Corps, Yayha Rahim Safavi, said Wednesday. He also said Iran has land-to-sea missiles that can hit any ship in the Persian Gulf. The Iranian news agency Fars quoted Safavi as saying the Iranian-made Shihab-3 missile, which has a range of 2,000 kilometers, recently was equipped with a remote guidance system that allows it to be controlled even after its launch. Meanwhile, Israeli officials in Washington welcomed reports Wednesday that the United States is set to brand the Iranian Revolutionary Guard Corps a terrorist entity, saying the move could help dislocate "the strategic backbone" of the regime in Teheran. The move, which the administration has yet to make official or to publicly confirm, ratchets up the pressure on Iran and indicates the US is willing to act unilaterally to stop Teheran's nuclear program. Placing the Revolutionary Guards on its list of terrorist organizations - the first time a national military entity would receive such a designation - would cut it off from the US financial system. Any assets that it, its members or subsidiaries may have in US jurisdictions would be frozen. Though the Revolutionary Guards isn't thought to have many assets in the US, the terrorist label could help convince European and Asian entities to curtail their connections with it and its businesses, though many analysts expect Europe and Asia to resist such pressure. "The Iranian Revolutionary Guard Corps are central to the whole exporting of the Iranian revolution," said an Israeli source in Washington, pointing to the Revolutionary Guards' involvement in sending arms and other resources to Hizbullah in Lebanon and to terrorist cells around the world. "That sort of designation will have an important impact on what they can do, where they do it, who is involved with them." The US accuses the Revolutionary Guards' foreign operations arm, the Quds Force - which may be the only part of the organization to get the terrorist designation from the US - of supporting insurgents in Iraq and the Taliban in Afghanistan. An elite military unit with an estimated 125,000 troops, the Revolutionary Guards also has its own air and naval forces, as well as interests in many major Iranian industries. US State Department spokesman Sean McCormack, who wouldn't confirm the terrorist designation, referred to the Revolutionary Guards as "a state within a state," with "tentacles into all sorts of different activities, into business activities, into banking activities." An official in the Iranian Foreign Ministry condemned the move, calling it "propaganda." The timing of the terrorist designation, which would be made under an executive order US President George W. Bush signed after the September 11, 2001, attacks, would likely coincide with deliberations at the United Nations over further sanctions against Iran, which has rejected two previous Security Council resolutions demanding that it halt enrichment of uranium. "The move reflects that there is a lot of frustration that the diplomacy isn't yielding results," said Ray Takeyh, a US expert on Middle East policy at the Council on Foreign Relations in Washington. White House spokeswoman Dana Perino said the US was committed to the diplomatic track and any move on terrorist designation shouldn't be seen as paving the way for the use of force. "All of our efforts are focused on the diplomatic actions that we are working through," she said. "Military action is not being contemplated." But analysts said the move would signal to Iran that the US was ready to take action against the Revolutionary Guards at some time in the future. "Once they get classified as terrorist, American institutions will have the legitimacy they need to fight the Revolutionary Guards," said Mustafa Alani, a terrorism expert at the Gulf Research Center in Dubai. "If this is a terrorist organization and it fires missiles in the Gulf, then the US would have an obligation to fight the Guards," he said. But, with American forces tied down in Iraq, Alani said he did not expect the US to take any such steps soon. AP contributed to this report.