WASHINGTON — The Treasury Department barred Iran’s oldest bank from American financial markets yesterday, escalating America’s financial war on Iran.

The move to designate Bank Sepah as a facilitator of Iran’s weapons of mass destruction programs marks the first time the Bush administration has taken advantage of a new clause in the 2006 Iran Freedom and Support Act that allows the Treasury Department to target Iranian entities for supporting the acquisition of missile technology. It is also the first penalty America has imposed since the U.N. Security Council passed watered-down sanctions against Iran’s nuclear program last month in U.N. resolution 1737.

The effort is designed to raise the liability costs of foreign banks that work with Iranian banks and front groups, and persuade European concerns in particular to divest from Iran altogether.

“As the evidence of Iran’s deceptive financial practices has mounted, financial institutions and other companies worldwide have begun to re-evaluate their business relationships with Iran,” the undersecretary for terrorism and financial intelligence, Stuart Levey, said at a press conference yesterday. “Many leading financial institutions have either scaled back dramatically or even terminated entirely their Iran-related business. They have done so of their own accord, many concluding that they did not wish to be the banker for a regime that funds terrorism.”

Bank Sepah was founded in 1925 and is Iran’s oldest financial institution, according to its Web site. It handles the salaries and pensions of Iran’s military and Revolutionary Guard and provides financial services for Iran’s Aerospace Industries Organization, a subsidiary of Iran’s Defense Ministry. Mr. Levey described Sepah as “the financial linchpin of Iran’s missile procurement network.”

A fact sheet distributed at the press conference yesterday says Aerospace Industries Organization financed the sale of Chinese-made missiles to Iran in 2005 and transferred more than $500,000 to a North Korean front company that is said to have provided Iran with missile technology.

Bank Sepah also works with the AIO affiliates Shahid Hemmat Industries Group and Shahid Bakeri Industries Group. The Treasury fact sheet says the former is involved in developing the Shahab missile, which is based on North Korean designs, is “capable of carrying unconventional warheads, and has a range of at least 1,500 kilometers.” The latter group has developed the Fajr rocket and Fateh-110 missile, which also is designed by North Korea and can be armed with chemical warheads.

Yesterday’s designation would freeze any assets Bank Sepah holds in American territory and prohibit future transactions between American banks and Sepah. As of early 2005, Bank Sepah held $13.9 billion in assets, according to the Bankers’ Almanac, as cited by the Treasury Department.

The chief Iranian nuclear negotiator and national security adviser, Ali Larijani, said yesterday that his nation was unfazed by the Treasury Department’s action. “This is not the first time that such measures of America take place, and the bank harassments of America have happened in some cases; however, these are not issues that can affect Iran’s will,” the Iranian Student News Agency quoted him as saying.

The deputy director for research at the Washington Institute for Near East Policy, Patrick Clawson, said it was significant that an Iranian bank was sanctioned for financing the procurement of missile parts, as opposed to supporting terrorism. “You have to go through an amazing number of legal hoops to designate anybody,” he said. “Doing this on terrorism is tough, but it’s easier to do this on proliferation. There is this counter-proliferation norm out there because of decisions like this. … It will not drive Iran into giving up its program tomorrow; it makes the nuclear matter into a wedge issue between the regime and the people.”

The designation yesterday is the second time in recent months America has gone after a major Iranian bank. In September, the Treasury Department sanctioned Iran’s Bank Saderat for providing financial services to Hezbollah and Hamas.