U.S. Sanctions Iran Airline for Quds Force, Hizbullah Transport, Calls for International Condemnation

U.S. Secretary of State Hillary Clinton on Wednesday denounced an alleged Iranian plot to assassinate the Saudi ambassador on American soil as a 'dangerous escalation' by Tehran, and called for International condemnation.

The U.S. Treasury Department hit Iran's Mahan Air with sanctions, saying it secretly transported members of a military force accused of plotting to kill the Saudi ambassador on U.S. soil.

As the United States began individual consultations with UN Security Council ambassadors -- a possible precursor to international condemnation or some other action -- Clinton reiterated that Iran must be "held accountable."

The plot is "a flagrant violation of international and U.S. law and a dangerous escalation of the Iranian government's long-standing use of political violence and sponsorship of terrorism," Clinton said.

"We call upon other nations to join us in condemning this threat to international peace and security," the top U.S. diplomat told journalists at a think-tank in Washington. "Iran must be held accountable for its actions."

Clinton said the plot was "directed by elements of the Iranian government," and said this "kind of reckless act undermines international norms and the international system."

The "U.S. has increased our sanctions on individuals within the Iranian government who are associated with this plot and Iran's support for terrorism," she said.

The Treasury Department said commercial carrier Mahan Air transported members of the Islamic Revolutionary Guards Corp-Quds Force -- a force directly linked to the plot -- and Hizbullah across the Middle East.

Any of the airline's assets in the United States will now be frozen and U.S. citizens will be barred from doing business with the firm.

The announcement came a day after Washington leveled the accusations at Tehran and the Treasury Department moved to block the assets of five individuals directly linked to the alleged assassination plot, which has sent diplomatic shockwaves around the world.

The Treasury Department accused Mahan Air of ferrying Iranian operatives between Iran and Syria for military training and Revolutionary Guards officers in and out of Iraq, and of transporting members of Lebanon-based Hizbollah -- which the U.S. deems a terrorist organization.

"Mahan Air's close coordination with the IRGC-QF -- secretly ferrying operatives, weapons and funds on its flights -- reveals yet another facet of the IRGC's extensive infiltration of Iran's commercial sector to facilitate its support for terrorism," said the Treasury's sanctions czar David Cohen.

"Following the revelation about the IRGC-QF's use of the international financial system to fund its murder-for-hire plot, today's action highlights further the undeniable risks of doing business with Iran.

Iran warned the United States to shy away from any confrontation over what Tehran called baseless allegations that it plotted to kill the Saudi ambassador to Washington.

The U.S. Justice Department on Tuesday named two Iranian suspects as Manssor Arbabsiar, 56, a naturalized U.S. citizen, and Gholam Shakuri, said to be an Iran-based member of the Quds Force, a unit of the Iranian Islamic Revolutionary Guard Corps.

Shakuri remains at large while Arbabsiar was arrested on September 29 at New York's John F Kennedy International Airport and appeared in court Tuesday in Manhattan. His lawyer said he would plead not guilty, if charged.

U.S. officials say the case was broken open by a paid U.S. source posing as a member of a Mexico-based drug cartel, which the defendants believed would provide explosives for the attack on the ambassador.

Mexico said it cooperated closely with the U.S. investigation, and said Arbabsiar was denied entry and put on a flight to New York, where he was arrested by U.S. authorities.