The Associated Press, Brussels, Belgium  - Thousands of Iranians rallied on Thursday near the venue of a European Union summit to demand that the EU comply with a court ruling and remove an exiled Iranian resistance movement from its list of terrorist organizations.

The noisy and colorful protest was held just 200 meters (yards) from the European Council building where EU leaders were preparing for a conference. Demonstrators waved EU and Iranian flags, and chanted "Freedom and democracy for Iran," and "The EU must implement the ruling."

Last December, the European Court of Justice overturned an EU decision from 2002 to freeze the assets of the People's Mujahedeen of Iran (PMOI). It was the first time an appeal to the EU's terror list was successful at the EU court.

However, the EU's Council of Ministers, which represents all 27 EU governments, has refused to remove the group from its list. Instead, it has asked the group to submit a legal reply to the ruling to state why it should not be on the list. The ruling had said EU governments failed to give the group a fair hearing.

The U.S. also lists the PMOI as a terrorist organization. The PMOI, founded by students at Tehran University in the 1960s, insists it advocates the overthrow of Iran's hard-line clerical regime in Tehran by peaceful means.

"We want to protest before the assembled European heads of state so they will be aware of this non-implementation of the ruling of a European court," said Maryam Rajavi, who heads the Paris-based The National Council of Resistance, the political wing of the PMOI.

"The rule of law in all of Europe is being undermined by the Council's decision," Rajavi told her cheering supporters.

Organizers said Iranians living in Britain, France, Belgium, the Netherlands and Germany had traveled to Brussels to attend the rally.