TEHRAN, Iran (AFP) — The US decision to stick by the nuclear deal with Iran, despite new sanctions on its missile program, provided welcome news for Iranian President Hassan Rouhani on Thursday, a day before his bid for re-election.

The administration of US President Donald Trump chose to continue waiving nuclear-related sanctions on Wednesday despite its criticism of the agreement.

That was a relief to Rouhani, who made the 2015 nuclear deal the centrepiece of his efforts to end Iran’s isolation and rebuild its economy with foreign investment.

He faces a tough battle for re-election on Friday against hardline cleric Ebrahim Raisi, who has called for a much tougher stance against the West and says the nuclear deal has not improved the lives of the poor.

Iranian presidential candidate Ebrahim Raisi greets his supporters during a campaign rally at Imam Khomeini Mosque in the capital Tehran on May 16, 2017. (AFP Photo/Atta Kenare)

Iranian presidential candidate Ebrahim Raisi greets his supporters during a campaign rally at Imam Khomeini Mosque in the capital Tehran on May 16, 2017. (AFP Photo/Atta Kenare)

But the Trump administration, dominated by fiercely anti-Iran sentiment, balanced the sanctions waivers with new measures against Iranian defense officials and a Chinese business tied to Tehran’s ballistic missile program.

The US says the program is a breach of international law because the missiles could carry nuclear warheads in the future.

Iran denies ever seeking nuclear weapons and foreign ministry spokesman Bahram Ghasemi said Thursday its missile program is part of its “absolute and legal right to build up the country’s defensive capabilities.”

“Iran condemns the US administration’s ill will in its effort to reduce the positive results of the country’s implementation of JCPOA (nuclear deal) commitments by adding individuals to the list of unilateral and illegal extraterritorial sanctions,” Ghasemi said on his Telegram channel.

He said Iran would retaliate by adding nine US individuals and companies to its own sanctions list, accusing them of “clear violations of human rights” in relation to their support for Israel or “terrorist groups” in the Middle East.

Under review

Trump threatened to tear up the nuclear deal during his campaign and has launched a review of its terms, but until then the deal requires him to renew sanctions relief at regular intervals.

His first deadline fell this week, related to sanctions on oil purchases through the Iranian central bank — part of a 2012 law called the National Defence Authorisation Act — that must be waived every 120 days.

The Trump administration will have to waive more sanctions next month if it wants to stick by the nuclear deal.

US President Donald Trump attends the US Coast Guard Academy commencement ceremony in New London, Connecticut, on May 17, 2017. (AFP Photo/Saul Loeb)

US President Donald Trump attends the US Coast Guard Academy commencement ceremony in New London, Connecticut, on May 17, 2017. (AFP Photo/Saul Loeb)

US Secretary of State Rex Tillerson said in April that Iran was complying with its side of the bargain, but has described the country as the world’s leading state sponsor of terrorism.

Washington has maintained a raft of other sanctions related to human rights and the missile programme that continue to stifle Iran’s efforts to rebuild its foreign trade.

This has been a major issue in the Iranian election, with hardliner Raisi accusing Rouhani of making too many concessions without gaining any economic benefits.

An Iranian oil worker rides his bicycle near an oil refinery south of the capital, Tehran, December 22, 2014. (AP/Vahid Salemi)

An Iranian oil worker rides his bicycle near an oil refinery south of the capital, Tehran, December 22, 2014. (AP/Vahid Salemi)

Although oil sales have rebounded since the deal came into effect in January 2016, Iran’s continued exclusion from the international banking system has prevented it from signing much-needed trade and investment deals with Europe and Asia.

Rouhani, who is still seen as the frontrunner in unofficial polls, has vowed to work towards the removal of remaining sanctions and called for more time to allow the benefits of the deal to reach ordinary Iranians.