The US opposed Iranian loans from the World Bank, formally declaring Iran a "Sponsor of International Terrorism". These sanctions persisted throughout the Reagan administration, leading to the ban on all US imports in Iran. President Bill Clinton expanded US sanctioning of Iran, banning all US participation in the Iranian oil and gas industry, preventing a $1 billion deal between a U.S oil company and Iran. The Clinton administration also passed the Iran and Libya Sanctions Act 1996, aiming to press foreign companies to join the US in boycotting Iran's oil and gas industry. This act applied to any company investing over $20 million into the industry, with any US or non US company facing sanctions if they are in breach of the terms. .
Though the string of US sanctions on Iran up to the Bush government undoubtedly reduced the funding available for terrorist organisations and damaged the Iranian economy, they did little to remove the autocratic government in power in Iran and served to further damage the image of Western society within the nation, pushing them further into isolation. .
By the time of George W. Bush's presidency, the rise of Islamic extremism, specifically the 9/11 Terror attacks, had markedly increased public support for action against any entity deemed involved in terrorism. This public support allowed the U.S to more aggressively respond to threats in the region. .
Iran's pursuit of Nuclear technology, whether for use in weaponry as alleged by the US, or for use in research and the production of power as claimed by the Iranian government, has been the main point of contention with marked progress having been made over the last decade. After the 2002 discovery of secret Nuclear facilities by the UN, Iran agreed to allow UN inspectors inside the Plants, where evidence of highly enriched Uranium was discovered. This prompted a tightening of Nuclear restrictions by the UN and accusations from the US that Iran was attempting to construct Weapons of Mass Destruction.