A US federal judge has found Iran liable for the 1983 bombing of a US barracks in Beirut, Lebanon, which left 241 marines dead.
Iran has denied involvement in the bombing
The ruling was the result of a suit brought by family members of the dead marines as well as those wounded in the 23 October 1983 attack, which was blamed on the militant Islamic group Hezbollah.
The marines were killed when an explosives-laden truck disguised as a water delivery vehicle rammed through protective
barricades at the entrance of the compound entrance and detonated in front of the barracks, demolishing the building.
District Judge Royce Lamberth said that, based on the evidence presented, it was "beyond question" that Hezbollah and its agents "received massive material and technical support from the Iranian Government".
The ruling comes amid growing tensions between Tehran and Washington, with the Bush administration stepping up pressure on Iran to clamp down on alleged al-Qaeda members in the country and stop pursuing nuclear weapons programmes.
The US troops had been deployed in Beirut as part of a peacekeeping force created in an attempt to bring Lebanon's ruinous civil war to an end.
Then-US President Ronald Reagan pulled American troops out of Lebanon a few months after the attack.
For the first time the families have seen some vindication
Plaintiff lawyer Thomas Fay
US court papers described the blast as the "largest non-nuclear explosion that had ever been detonated on the face of the Earth".
The lawsuit was filed by the bombing victims' families under a 1996 US law which permits American citizens to sue nations found by the US to sponsor terrorism.
"I literally sank to my knees in tears when I heard the news," Lynn Smith Derbyshire, whose elder brother was killed in the explosion, told the Associated Press news agency.
"I just feel like it's justice. I'm just so grateful that we've been able to prove in a court of law that there's a guilty party."
The amount of damages to be awarded to the plaintiffs has not yet been established, however a lawyer for the plaintiffs said that it could reach a total as high as $2.3bn, French news agency AFP reported.
"We are really pleased by the decision," lawyer Thomas Fay said.
"For the first time the families have seen some vindication. More than anything else the families want terrorism to stop."
Iran has always denied involvement in the bombing, and did not respond to the lawsuit.
The ruling follows a two-day trial held in March.