TEHRAN/WASHINGTON Saudi Arabia said on Wednesday Iran would "pay the price" for what U.S. officials described as a plot to kill the Saudi ambassador in Washington, while Tehran called the accusation a fabrication designed to sow discord in the region.
U.S. officials said the elaborate plot -- which they compared to a film script -- would justify pushing for a new round of U.N. sanctions against Iran. They imposed sanctions on Wednesday on Mahan Air, a commercial Iranian airline which they said provided funds and transport for Iran's elite forces.
Tehran said the allegations threaten stability in the Gulf -- where Saudi Arabia and Iran, the biggest regional powers, are fierce rivals and Washington has a huge military presence.
Speaking in London, Saudi prince Turki al-Faisal, himself a former ambassador to Washington, said: "The burden of proof is overwhelming... and clearly shows official Iranian responsibility for this.
"Somebody in Iran will have to pay the price."
U.S. Vice President Joe Biden told ABC TV that Washington was working on a new round of international sanctions against Iran and "nothing has been taken off the table."
Ali Larijani, Iran's parliament speaker, said the "fabricated allegations" aimed to divert attention from revolts in the region and turn Muslim countries against each other.
"America wants to divert attention from problems it faces in the Middle East, but the Americans cannot stop the wave of Islamic awakening by using such excuses," Larijani said.
"These claims are vulgar," he said in an open session of parliament. "We believe that our neighbors in the region are very well aware that America is using this story to ruin our relationship with Saudi Arabia."
U.S. authorities said on Tuesday they had unmasked the plot by two Iranians linked to security agencies to assassinate Saudi Ambassador Adel al-Jubeir. One, Manssor Arbabsiar, was arrested last month while the other is believed to be in Iran.
At a news conference, FBI Director Robert Mueller described a convoluted conspiracy involving monitored international calls, Mexican drug money and an attempt to blow up Jubeir, a confidante of King Abdullah.
"Though it reads like the pages of a Hollywood script, the impact would have been very real and many lives would have been lost," Mueller said.
Some Iran experts were skeptical, saying they could not see the motive for such a plot. Iran has in the past assassinated its own dissidents abroad, but an attempt to kill an ambassador would be a highly unusual departure.
U.S. court documents accuse Arbabsiar, a naturalized U.S. citizen with an Iranian passport, of paying $100,000 to an informant, who had posed as an associate of a Mexican drug cartel but in fact worked for the U.S. Drug Enforcement Agency and alerted the authorities to the plot.
Arbabsiar made phone calls to Iran to the second suspect, Gholam Shakuri, described as a member of a unit of Iran's Revolutionary Guards called the Quds Force.
"It strikes me that Iran and the Quds Force would not conduct a mission like this. It's possible but unlikely," said Dubai-based defense analyst Theodore Karasik.
"It doesn't fit the modus operandi of the Quds Force or Iranian intelligence services. If it was true, it would be one of the most botched operations of its kind."
Rosemary Hollis, head of Middle East studies at London's City University, said it was hard to say how serious the plot was, especially as the suspects were caught in a sting operation, but the announcement was "an important signal of a very volatile and potentially dangerous period ahead."
"It feels like a warning that the U.S. is about to get more assertive with Iran and will do so in close coordination with the Saudis," she said.
Mainly Shi'ite Iran and Sunni-ruled Saudi Arabia are bitter regional rivals and see themselves as protectors of Islam's two main sects. Nevertheless, they maintain diplomatic ties and even signed a security agreement in 2001. Iranian President Mahmoud Ahmadinejad visited Riyadh in 2007.
The United States has led a global effort to isolate Iran and pile on U.N. sanctions over Tehran's nuclear program, which Washington says aims to produce atomic weapons. Iran says it is only pursuing its right to peaceful nuclear power.
U.S. diplomatic cables from Riyadh leaked by anti-secrecy group WikiLeaks over the past year show Riyadh repeatedly pushing the United States to take a tougher stance toward Iran, including possibly using military force.
Tensions rose between Riyadh and Tehran this year when Saudi Arabia sent troops to help Bahrain's Sunni leaders put down Shi'ite-led pro-democracy protests.
This month Riyadh accused some among its own Shi'ite Muslim minority of conspiring with a foreign power -- a clear reference to Iran -- following street clashes.
But Iranian analyst Saaed Leylaz said it was hard to see why Tehran would risk involving itself in a plot like the one alleged in Washington.
"Killing the Saudi envoy in America has no benefit for Iran," he said. "The consequences are dangerous... It could cause military confrontation in 2012 between Iran and America."
ACTION AT U.N.
A Western diplomat in Riyadh said the charges were likely to be discussed at the U.N. Security Council.
"The U.S. and Saudi Arabia and other allies are discussing the possibility of taking this to the Security Council because this is an assault on a foreign diplomat in the U.S," he said.
U.S. President Barack Obama, who seeks reelection next year, called the alleged conspiracy a "flagrant violation of U.S. and international law." Secretary of State Hillary Clinton said she hoped countries hesitant to enforce existing sanctions on Iran would now "go the extra mile."
Iran also sought recourse in the world body. It's ambassador to the United Nations complained of U.S. "warmongering" in a letter to Secretary-General Ban Ki-Moon.
"The U.S. allegation is, obviously, a politically motivated move and a showcase of its long-standing animosity toward the Iranian nation," Mohammad Khazaee wrote.
The State Department issued a three-month worldwide travel alert for American citizens.
The alleged plot "may indicate a more aggressive focus by the Iranian government on terrorist activity against diplomats from certain countries, to include possible attacks in the United States," it said in a statement.
Kenneth Pollack, a former CIA and National Security Council analyst, said a plot against targets inside the U.S. "would be a first for the Quds Force.... I do want to hear more about what evidence (they) have."
(Additional reporting by Dmitry Zhdannikov, Basil Katz, James Vicini, Mark Hosenball, Tabassum Zakaria, Matt Spetalnick, Asma Alsharif, Andrew Hammond, Andrew Quinn and Louis Charbonneau; Writing by Andrew Hammond; Editing by Peter Graff)