By CONSTANT BRAND

Associated Press, Brussels, Belgium -- European Union governments decided Thursday to keep an Iranian opposition group blacklisted as a terrorist organization after reviewing its demand to be removed following a recent court ruling, diplomats said.

The Paris-based People's Mujahadeen Organization of Iran, which seeks the overthrow of Iran's Islamic regime, is also on the U.S. government's list of terror groups.

Former Iraqi leader Saddam Hussein let the group _ also known as the Mujahedeen Khalq, or MEK _ operate camps in Iraq from which it staged attacks on Iran. The group says it has renounced military action and its militants in Iraq have handed weapons over to U.S.-led forces.

Shahin Gobadi, a group spokesman, said members would organize a demonstration in Paris on Saturday to protest the EU's decision.

Maryam Rajavi, head of the National Council of Resistance, the group's Paris-based political wing, condemned the EU decision, calling it "a political, legal and ethical scandal which makes a mockery of the court's judgment and the rule of law."

The People's Mujahadeen is also seeking $1.35 million in damages, claiming the EU has refused to apply an order last year from the European Court of Justice that annulled a 2002 decision to place the organization on the terrorist blacklist and order its assets frozen.

EU legal experts say the court's ruling focused on procedural problems and did not imply the group had to be unlisted. The experts say the EU has complied with the judgment by supplying documents explaining its decision and letting the group present counter-arguments in the review.

The People's Mujahadeen has said the EU documents were inadequate and failed to recognize that the group has declared a halt to military action against the Iranian government