The Obama administration says Iran's nomination of a former hostage-taker as its ambassador to the United Nations is "extremely troubling".
US senators have also balked at Iran's pick of Hamid Aboutalebi, who was part of a Muslim student group which seized the US embassy in Tehran in 1979.
The 52 Americans were held for 444 days during the crisis.
Senator Ted Cruz says he will introduce legislation to block Iran's application for a US visa for Mr Aboutalebi.
'In your face'
Department of State spokeswoman Marie Harf said at Wednesday's daily briefing: "I will say that we think this nomination would be extremely troubling.
"We're taking a close look at the case now, and we've raised our serious concerns about this possible nomination with the government of Iran."
Mr Aboutalebi has reportedly said he had minimal involvement in the hostage-taking group, named the Muslim Students Following the Imam's Line.
Officials for Iran's Mission to the United Nations have so far declined to comment.
Mr Cruz, a Texas Republican, said on the Senate floor on Tuesday: "It is unconscionable that in the name of international diplomatic protocol, the United States would be forced to host a foreign national who showed a brutal disregard of the status of diplomats when they were stationed in his country."
"This person is an acknowledged terrorist," he added.
His legislation would require US President Barack Obama to deny a visa to any UN applicant determined to have engaged in terrorist activity.
Fellow Republican Senator John McCain called Mr Aboutalebi's appointment "a really kind of an in-your-face action by the Iranian government", the Associated Press news agency reports.
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