U.S. agents have disrupted a $1.5 million "murder-for-hire scheme" involving Iran, Attorney General Eric Holder said Tuesday.
Holder said the alleged plan was directed by elements of the Iranian government and involved a plot to kill the Saudi ambassador to the United States.
"The U.S. is committed to holding Iran accountable," Holder said.
A spokesman for Iranian President Mahmoud Ahmadinejad said Tuesday that the alleged plot "is a fabrication."
Ali Akbar Javanfekr said the Iranian government is awaiting details, but suggested U.S. authorities are attempting to distract American citizens from "domestic problems" by convincing them there is an outside threat.
FBI Director Robert Mueller said the alleged terror plot "reads like the pages of a Hollywood script," but the implications are real.
"This case illustrates that we live in a world where borders and boundaries are increasingly irrelevant," Mueller said.
An FBI agent's affidavit obtained by CNN Tuesday accused two men of conspiring to murder Saudi Ambassador Adel Al-Jubeir.
The complaint alleges that Manssor Arbabsiar and Gholam Shakuri began a plot this spring to kill Al-Jubeir.
The U.S. attorney for the Southern District of New York called the alleged plot "well-funded and pernicious."
"Details of that murder plot are chilling," Preet Bharara told reporters Tuesday.
In the affidavit, FBI agent O. Robert Woloszyn says the case involves the Iranian Islamic Revolutionary Guard Corps. Woloszyn described the corps as an arm of the Iranian military that is suspected of being involved in a number of foreign operations.
The IRGC is made up of a number of branches, including the Qods Force, which "conducts sensitive covert operations abroad, including terrorist attacks, assassinations, and kidnappings, and provides weapons and training to Iran's terrorist and militant allies," said the affidavit, which Woloszyn signed on Tuesday.
The Qods Force is accused by U.S. officials as sponsoring attacks against U.S. and coalition forces in Iraq, and in October 2007, the Treasury Department designed them as "providing material to the Taliban and other terrorist organizations," the affidavit said.