The group is a front for the Kurdistan Workers Party, or PKK, which has been fighting the Turkish government for 25 years, said Stuart Levey, U.S. Treasury undersecretary for terrorism and financial intelligence.

"With today’s action, we are exposing PJAK’s (Free Life Party of Kurdistan) terrorist ties to the PKK and supporting Turkey’s efforts to protect its citizens from attack," Levey said.

Around 40,000 people have been killed in fighting between the PKK and the Turkish military since 1984, when the PKK took up arms with the aim of establishing an ethnic Kurdish homeland in southeastern Turkey.

Turkey has conducted air strikes and artillery attacks on PKK bases in northern Iraq, and last year Turkey sent thousands of troops over the border to end the incursions.

In recent years, Iranian forces have often clashed with PJAK guerrillas, who operate out of bases in northern Iraq. Kurds are large minorities in Turkey, Iran, Iraq and Syria.

The U.S. move will freeze any assets the PJAK has under U.S. jurisdiction and prohibits American citizens from doing business with the organization, Levey said in a statement.

The Treasury said the PKK had authorized some of its Iranian-Kurdish members to create a splinter group to appeal to Iranian Kurds.

It also said PJAK had an armed wing called the East Kurdistan Defense Forces, which had been acting independently in Iran. But the Treasury said that the PKK high command had intervened and recalled them to northern Iraq. (Reporting by Corbett Daly; editing by Mohammad Zargham)