UPDATE 3-Suicide bomber kills 27 members of Iran's elite Revolutionary Guards

A suicide bomber killed 27 members of Iran's elite Revolutionary Guards on Wednesday, state media said, in a southeastern region where security forces are facing a rise in attacks by militants from the country's Sunni Muslim minority. The Sunni group Jaish al Adl (Army of Justice), which says it seeks greater rights and better living conditions for the ethnic minority Baluchis, claimed responsibility for the attack, the semi-official Fars news agency reported.

A suicide bomber driving a vehicle laden with explosives attacked a bus transporting members of the Guards, the force said in a statement. Thirteen people were wounded. A video posted by Fars showed blood and debris at the site of the attack on a road in a volatile area near the Pakistan border where militants and armed drug smugglers operate.

The bus was turned into a twisted pile of metal, a photo published on Fars showed. Reuters could not independently verify the image. While Sunni militant groups are not regarded as a major threat, the attack dealt a blow to Iran's security establishment, which has often said it can repel any threat no matter how big, even from the United States and its ally Israel.

MILITARY MIGHT AND BUSINESS INTERESTS The assault in impoverished Sistan-Baluchistan province -- among the worst ever on the Guards -- illustrated that Iran's elite force, which answers directly to Supreme Leader Ayatollah Ali Khamenei, can be vulnerable to guerrilla-style operations.

The Guards have an estimated 125,000-strong military with army, navy and air units. The force also operates outside of Iran's borders in countries such as Iraq and Syria and runs a vast business empire. "The self-sacrificing military and intelligence children of the people of Iran will take revenge for the blood of the martyrs of this incident," Fars quoted Foreign ministry spokesman Bahram Qassemi as saying.

Iranian Vice President Eshaq Jahangiri said Iran would wage an "unrelenting battle against terrorism" in response to the attack. Iran's Shi'ite Muslim authorities say militant groups operate from safe havens in Pakistan and have repeatedly called on the neighbouring country to crack down on them.

Iran had enjoyed relative stability compared to Arab neighbours who have grappled with political and economic upheaval touched off by popular uprisings in 2011. But economic hardships fuelled by U.S. sanctions have triggered waves of protests that sometimes call for Iran's clerical leaders to step down.

Twelve members of the Guards were among 25 people killed last autumn by gunmen on a military parade in the city of Ahvaz in the southwest. The Sunni Islamic State and an Arab separatist group both claimed responsibility. Jaish al-Adl emerged as the main armed opposition movement in the southeast after members of another Sunni group, Jundullah, joined it, after their leader was captured on a plane in 2010. He was tried and executed. (Writing by Michael Georgy Editing by Gareth Jones)

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