Reuters I� Parisa Hafezi: Iran threatened on Friday to retaliate against the U.S. Senate's vote to extend the Iran Sanctions Act (ISA) for 10 years, saying it violated last year's deal with six major powers that curbed its nuclear program.

The ISA was first adopted in 1996 to punish investments in Iran's energy industry and deter its pursuit of nuclear weapons. The extension was passed unanimously on Thursday.

U.S. officials said the ISA's renewal would not infringe on the nuclear agreement, under which Iran agreed to limit its sensitive nuclear work in return for the lifting of financial sanctions that harmed the country's economy.

But senior Iranian officials took odds with that view.

Iran's nuclear chief, Ali Akbar Salehi, who played a key role in reaching the nuclear deal, described it as a "clear violation" of the 2015 deal if implemented.

"We are closely monitoring the developments," state TV quoted Salehi as saying. "If they implement the ISA, Iran will take action accordingly."

The extension risks deepening hostilities between Iran and the United States ahead of the inauguration of U.S. President-elect Donald Trump, who said during his election campaign that he would abandon the deal.

Iran's most powerful authority Supreme Leader Ayatollah Ali Khamenei had already warned in November that an extension would be viewed in Tehran as a violation of the accord.

"Iran has shown its commitment to its international agreements, but we are also prepared for any possible scenario. We are ready to firmly protect the nation's rights under any circumstances," Foreign Ministry spokesman Bahram Ghasemi said in comments reported by state news agency IRNA.

RETALIATION

The U.S. senate vote will be a blow for Iran's pragmatist President Hassan Rouhani and may embolden his rivals ahead of Iran's 2017 presidential election.

Ayatollah Khamenei and his loyalists, drawn from among Islamists and Revolutionary Guards, have criticized the deal and blamed Rouhani for its failure to deliver swift improvements in living standards since lifting of sanctions in January.

It was not immediately clear what form any eventual retaliation might take.

One lawmaker quoted by the semi-official Tasnim news agency said Iran's parliament planned to discuss a bill that would prevent the government purchasing "American products".

Such a bill could jeopardize deals such as U.S. planemaker Boeing's (BA.N) tentative agreement to sell passenger jets to Iran.

The White House had not pushed for an extension of the sanctions act, but had not raised serious objections. Some congressional aides said they expected President Barack Obama to sign it.

The ISA had been due to expire on Dec. 31. Lawmakers said the extension would make it easier for sanctions to be reimposed if Iran violated the deal.

Trump described Iran in campaign speeches as the world's largest state sponsor of terrorism and dismissed the nuclear accord as "one of the worst deals I've ever seen negotiated."

Influential Friday prayer leaders, appointed by�Ayatollah Khamenei, strongly denounced the ISA extension and called on the government to take action, according to the IRNA news agency.

(Writing by Parisa Hafezi; Editing by Janet Lawrence and Richard Lough)

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