Iran has no plans to name a new diplomat to the United Nations after the United States blocked its choice in a rare rebuke, its Foreign Ministry said.
The administration of Barack Obama said the US had informed Iran it would not grant a visa to Hamid Aboutalebi, a member of the group responsible for the 1979 takeover of the US Embassy in Tehran.
While US officials had been trying to persuade Iran to simply withdraw Mr Aboutalebi's name, the announcement amounted to an acknowledgement that those efforts had not been successful.
"The Ministry of Foreign Affairs is pursuing this issue through anticipated legal channels at the UN," Deputy Foreign Minister Abbas Araghchi was quoted as saying by Iran's semi-official Mehr news agency. "We have no choice to substitute Mr Aboutalebi."
He is alleged to have participated in a Muslim student group that held 52 Americans hostage for 444 days during the embassy takeover.
He has insisted his involvement in the group Muslim Students Following the Imam's Line was limited to translation and negotiation.
Iran says he is one of the country's best diplomats and has previously received a US visa. He has already served at Iranian diplomatic missions in Australia, Belgium and Italy.
Hamid Babaei, a spokesman for the Iranian UN Mission, said the decision was not only regrettable but "in contravention of international law, the obligation of the host country and the inherent right of sovereign member-states to designate their representatives to the United Nations".
As host country for the United Nations, the US must provide rights to persons invited to the New York headquarters. However, exceptions can be made when a visa applicant is found to have engaged in spying against the US or poses a threat to American national security.
Denying visas to UN ambassadorial nominees or foreign heads of state who want to attend United Nations events in the US is extremely rare, though there appears to be precedent.
According to a paper published by the Yale Law School, the United States rejected several Iranians appointed to the UN in the 1980s who had played roles in the embassy hostage crisis or other acts against American citizens.
Iran's choice of Mr Aboutalebi had pinned President Obama between congressional pressure to deny the envoy entry into the US and the White House's delicate diplomatic dealings with Tehran.
After more than three decades of discord, US and Iranian officials have started having occasional direct contact, including a phone call last autumn between Mr Obama and new Iranian president Hassan Rouhani.
The US and its international partners also have reached an interim agreement with Iran to halt progress on Tehran's disputed nuclear program. Officials are in the midst of negotiating a long-term agreement that seeks to eliminate concerns Iran may use its nuclear capabilities to build a weapon.