Payments to cover war costs

president carter called the victims of kidnapping "victims of terrorism and anarchy" and added that the united states was not going to give in to blackmail. in the united states, they see hostage-taking as an outrage on the part of the islamist movement that violated the principle of international law on the immunity and inviolability of diplomats and their embassies.

carter refused to yield to the demands, khomeini used the situation to consolidate his power and nullify the challenges of the moderate wing of his government, headed by its president. the euphoria over the humiliation of the most powerful nation distracted the iranian people from the economic difficulties of their country. carter, in april 1980, broke diplomatic relations with iran and imposed a trade embargo, except medicine and food. iranian funds in the us they were frozen and accounted for to compensate the hostages when they were released and to pay the demands of us companies against iran.