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Saudi Arabia has delivered an intimidating warning to Iran that ‘somebody will have to pay the price’ for the country’s alleged plot to assassinate its U.S. ambassador in Washington D.C.

A dramatic international standoff between the U.S., Saudi Arabia and Iran is intensifying this week and could end up pushing America to the brink of military conflict.

President Obama last night spoke to King Abdullah of Saudi Arabia about the alleged plot and they agreed it was ‘a flagrant violation of international law,’ White House spokesman Jay Carney said.

Held to account: It is unclear, however, if Mahmoud Ahmadinejad was aware of the plot

It comes as lawmakers across America declared economic war on Iran as anger grew following revelations of the alleged assassination attempt by Iranian government agents.

'The burden of proof and the amount of evidence in the case is overwhelming and clearly shows official Iranian responsibility for it. This is unacceptable. Somebody in Iran will have to pay the price, and that price will have to be on the terms acceptable to the norms and practices in Iran and other countries'

Ex-chief of Saudi intelligence services Prince Turki al-Faisal

The most senior politicians in the U.S. hold Iran accountable for a 'significant terrorist act' and senators have declared it an 'act of war' which should be avenged with serious economic sanctions.

‘The burden of proof and the amount of evidence in the case is overwhelming and clearly shows official Iranian responsibility for it,’ ex-chief of Saudi intelligence services Prince Turki al-Faisal said.

‘This is unacceptable. Somebody in Iran will have to pay the price, and that price will have to be on the terms acceptable to the norms and practices in Iran and other countries.’

Calls for action this week have come, among many others, from the chairman of the Senate Armed Services Committee, who said a 'serious response' by the U.S. was imperative.

Other senators called for President Barack Obama to revisit a request by 92 lawmakers for the U.S. to crush Iran's central bank. This followed similar calls from Washington’s most influential voices.

WASHINGTON, DC - OCTOBER 11: Senate Armed Services Chairman Carl Levin

Standing strong: Senator Carl Levin, left, called the plot a 'damn serious threat to the United States', while Mark Kirk, right, said it was an 'act of war'

HOW THE U.S. COULD CRIPPLE IRAN'S FINANCES

In August, a group of 92 senators wrote to President Obama calling for the government to cripple Bank Markazi, Iran’s central bank.

Going down this route would consist of banning all transactions with the bank, which has been accused of being ‘one of the key financiers of Iran’s nuclear ambitions’.

Doing so together with European allies would significantly hinder cash flow in the country – crushing the value of its currency, which would make it impossible for the country to trade.

Iran already has considerable trouble transferring money around the world - so much so it is already talking to the Chinese about setting up a barter system - so any further damage to its currency would be significant.

While it has blacklisted other banks in Iran and has previously called on financial institutions to avoid doing business with Iran, the government has so far fallen short of trying to cripple the central bank.

‘If implemented, new sanctions against the Iranian central bank could blunt the country’s push toward becoming a nuclear power,’ the letter, which was signed by all but eight senators, stated.

House Speaker John Boehner called on President Obama to 'hold Iran's feet to the fire', taking swift and decisive action against the Ahmadinejad administration after the discovery of the plot.

Vice President Joe Biden said that 'nothing has been taken off the table' as the U.S. considers possible sanctions and military action. He insisted the consequences for Iran will be 'serious'.

Manssor Arbabsiar, a 56-year-old U.S. citizen who also holds an Iranian passport, appeared in court in New York accused of trying to hire a Mexican drugs cartel to carry out the killing.

He is accused of plotting to kill Adel Al-Jubeir by bombing a restaurant, before setting off blasts at the Saudi and Israeli embassies.

The devastating plan was foiled after Arbabsiar offered a government informant posing as a Mexican drug cartel associate a $1.5million bounty to help carry out the attack.

Senators took the opportunity to offer their opinions about how best to respond to the plot.

Senator Mark Kirk declared it an 'act of war', while calling on the Obama administration to reconsider targeting the Iranian central bank in response.

A closed-door Senate briefing last night by the FBI, CIA, State Department and Treasury has revealed there may be a series of plots by Iranian agents.

After the meeting, Senate Intelligence Committee chairman Dianne Feinstein told ABC News: 'There may be a chain of these things.

'There may be a chain of these things. It's hard for me to believe that there is just one plot involving the United States. I think we need to explore whether there are other plots going on... in other countries'

Senate Intelligence Committee chairman Dianne Feinstein

'It's hard for me to believe that there is just one plot involving the United States. I think we need to explore whether there are other plots going on... in other countries.'

In August, 92 senators signed a letter to President Obama calling for sanctions to be imposed on the bank, which would cripple the country financially.

Speaking on WLS radio, Senator Kirk said the bank was the 'paymaster' for the Quds Force, a special unit of Iran’s Revolutionary Guard said to have been involved in the terror plot.

Banning all transactions by the Federal Reserve and the EU Central Bank to Iran's Bank Markazi would cripple its currency, he said.

'You cut them off from the central reserve system and the Bank for International Settlements, the backbone of international finance.

'You cut them off from the central reserve system and the Bank for International Settlements, the backbone of international finance. At that point, the Iranian currency becomes almost unmanageable... heir currency would become like North Korea's currency'

Senator Mark Kirk

'At that point, the Iranian currency becomes almost unmanageable... Their currency would become like North Korea's currency.'

‘And with evidence now of a plot to blow up targets in Washington, D.C., by the government of Iran, it’s pretty much time to go ahead and take this action.'

Senator Carl Levin said the alleged plan to kill the Saudi ambassador was 'a damn serious threat to the United States'. He added that there should be a serious response by the U.S.

'It's in the United States, an alleged effort to assassinate somebody on our territory who, by the way, is an ambassador to the United States,’ he said.

WHAT ACTION WILL THE U.S. TAKE AGAINST IRAN IN RETALIATION?

A diplomatic rebuke

The U.S. has started to build an international consensus of condemnation of Iran. 'I think what we have to do is unite the entire world against the Iranian behaviour,' Vice President Joe Biden told CBS News this morning. Secretary of State Hillary Clinton said that she and President Obama have been making calls to foreign leaders as they seek to develop 'a chorus of states condemning this behaviour'. 'We think the facts of this case, which include the outreach by the Iranian authorities to a Mexican drug cartel seeking a murder-for-hire assassin will be quite disturbing to officials in countries that have even in the past give Iran a pass,' she said. Last night the State Department sent a cable to all American embassies and consulates around the world telling them to put the case against Iran before foreign authorities.

Economic sanctions

The U.S. Treasury Department has announced economic sanctions against five Iranians, including four senior members of the Quds force, which has been implicated in the alleged plot. The International Air Transport Association has also suspended Iran Air, the Iranian national airline, from the system for processing international ticket payments. The UN has imposed four sets of sanctions on Iran since December 2006 and Hillary Clinton said that the uncovering of the plot makes tougher sanction enforcement more likely. 'We've surprised Iran in the world in how effectively we've enforced these sanctions. I think we've done a better job than people expected,' she said. 'But I want to do even more, close every loophole, make every country go the extra mile to enforce these sanctions and I think this helps us on that.'

Military action

Vice President Joe Biden said that 'nothing has been taken off the table' as he refused to rule out military actions against Iran. Peter King, head of the House Homeland Security Committee, told the Daily News that he 'would support whatever action the President feels is appropriate… however severe.' But the U.S. lacks international support for large-scale military action against Iran. Senior Obama administration officials have told ABC News that the U.S. response will not include the possibility of an armed conflict with Iran. A senior U.S. defence official said that there had been no change in military positions in response to the attack.

'So whether or not that constitutes an act of war against the United States' is a valid question.

Representative Michael McCaul, a Texas Republican who heads a Homeland Security subcommittee, said the alleged plan would be an act of war if it was indeed sponsored by the Iranian government.

Former National Security Advisor KT McFarland added: 'This takes it to a whole new level of Iranian aggressiveness… (The U.S.) will presumably ramp up efforts on sanctions, but technically you can construe this as an act of war.'

Rhetoric against Iran has built as the U.S. is poised to taken an even stronger stance against Tehran Mr Biden said it was 'an outrageous act and the Iranians are going to have to be held accountable.

'The first thing we're going to be doing is making sure the entire world and all the capitals of the world understand what exactly the Iranians had in mind,' he told Good Morning America.

'It's an outrage that violates one of the fundamental premises upon which nations deal with one another, and that is the sanctity and safety of their diplomats.

Republican chairman of the House Homeland Security Committee Peter King said that the 'flagrant and notorious' plot was 'an act of war' and that military action could not be ruled out.

'We should not be... automatically saying we're not going to have military action,' he told CNN.

'Everything should be left on the table when you are talking about a potential attack [in] the United States, an act of war.'

A spokesman for British Prime Minister David Cameron said that Britain is consulting with the U.S. on action against Iran.

'We are in close touch with the U.S. authorities and we will support measures to hold Iran accountable for its actions,' he said.

Last night Secretary of State Hillary Clinton said the plot 'crosses a line' in Iran's state sponsorship of terrorism and will further isolate the Islamic republic.

Mrs Clinton said: 'This really, in the minds of many diplomats and government officials, crosses a line that Iran needs to be held to account for.'

'The idea that they would attempt to go to a Mexican drug cartel to solicit murder-for-hire to kill the Saudi ambassador, nobody could make that up, right?' she said.

Mrs Clinton said the scheme 'creates a potential for international reaction that will further isolate Iran, that will raise questions about what they're up to, not only in the United States and Mexico'.

Arbabsiar and another man, Gholam Shakuri, have been charged with the $1.5million terror plot.

TIMELINE TO MURDER: HOW THE PLOT ESCALATED

May 24: Arbabsiar first meets someone posing as an associate of a drug trafficking cartel in Mexico, who was actually a U.S. Drug Enforcement Administration informant codenamed CS-1. Arbabsiar asked about the informant's knowledge of explosives and explained he was interested in attacking a Saudi embassy.

June 2: Arbabsiar returned to Mexico and held more meetings with the informant in late June and early July. He allegedly said his associates in Iran had discussed a number of 'violent missions' including the murder of the Saudi ambassador to Washington, Adel Al-Jubeir.

July 14: Arbabsiar meets CS-1 again, they discuss plot details - how four men and a payment of $1.5 million are needed.

July 17: The pair meet again in Mexico. CS-1 says one member of his gang has already carried out surveillance on the ambassador and they allegedly discussed bombing a restaurant in the United States where the ambassador frequently dined.

August 1 and 9: Arbabsiar makes two overseas wire transfers 'totalling approximately $100,000'

September 28: Arbabsiar flies to Mexico, is refused entry and is sent back to JFK

September 29: Arrested at JFK by federal agents

October 4-5: Arbabsiar, who has been in U.S. custody since his arrest, made phone calls which were monitored by U.S. law enforcement agents to Shakuri, described as a member of the Quds Force, a branch of the Iranian Islamic Revolutionary Guard Corps. He is believed to be based in Iran.

Shakuri allegedly confirmed to Arbabsiar the plot should move forward as quickly as possible, stating: 'Just do it quickly, it's late'

Shakuri, whom authorities said was a member of the Quds Force, a branch of the Iranian Islamic Revolutionary Guard Corps, is still at large.

A third man named Abdul-Reza Shahlai is accused of coordinating the alleged plot.

Shahlai, an Iranian official who is Arbabsiar's cousin, has previously been accused of plotting an attack in Iraq which killed five U.S. soldiers.

'I may not be living with him being separated, but I cannot for the life of me think that he would be capable of doing that,' she told KVUE. 'He was at the wrong place at the wrong time. I'm sure of that.'

Iranian officials have laughed off the accusation it was a plot backed by the government in Tehran.

Shocking details of the plot have emerged as authorities reveal the scale of the operation to foil the attack.

According to prosecutors, when asked by undercover agents about the potential loss of innocent life in the bombings, Arbabsiar replied, 'They want that guy [al-Jubeir] done.

Attorney General Eric Holder said earlier this week: 'The criminal complaint unsealed today exposes a deadly plot directed by factions of the Iranian government to assassinate a foreign Ambassador on U.S. soil with explosives.

Arbabsiar was arrested on September 29 in New York at JFK airport, according to Holder.

He was working for the Iranian Islamic Revolutionary Guard and had confessed to a plot.

Officials said he had flown from Iran to Mexico City, via Frankfurt, but had been refused entry to Mexico and had been put on a plane to New York.

Mexico worked closely with U.S. authorities to help foil the alleged plot - issuing an immigration alert on Arbabsiar after U.S. authorities told Mexican counterparts that he was the subject of an arrest warrant.

Target: The plot would have also attacked the Israel embassy, pictured here, in Washington D.C.

Julian Ventura, undersecretary for North America, said the alert prompted Mexican immigration officials to turn Arbabsiar away when he tried to enter Mexico on September 28.

'It's in the United States, an alleged effort to assassinate somebody on our territory who, by the way, is an ambassador to the United States'

Senator Carl Levin

Arbabsiar was arrested the next day when he arrived at New York's Kennedy International Airport.

After his arrest, Arbabsiar made phone calls to Shakuri in Iran which were monitored.

During the calls, Shakuri allegedly confirmed that Arbabsiar should move forward with the plot to murder the Ambassador and that he should accomplish the task as quickly as possible, stating on October 5, 'Just do it quickly, it’s late.'

Bombings of the Saudi and Israeli embassies in Buenos Aires and Argentina were also discussed as part of the plan, according to officials.

'I think the U.S. government is busy fabricating a new scenario and history has shown both the U.S. government and the CIA have a lot of experience in fabricating these scenarios and this is just the latest one'

President Mahmoud Ahmadinejad's spokesman Ali Akbar Javanfekr

President Mahmoud Ahmadinejad has laughed off the accusations that Iran was behind the plot.

His spokesman Ali Akbar Javanfekr told CNN: 'I think the U.S. government is busy fabricating a new scenario and history has shown both the U.S. government and the CIA have a lot of experience in fabricating these scenarios and this is just the latest one.

‘I think their goal is to reach the American public. They want to take the public’s mind off the serious domestic problems they’re facing these days and scare them with fabricated problems outside the country.'

How this convenient story was told in the Daily Mail:

'Somebody will have to pay the price': Saudis issue menacing threat to Ahmadinejad as U.S. senators declare economic war on Iran over terror plot

HOW THE U.S. COULD CRIPPLE IRAN'S FINANCES

WHAT ACTION WILL THE U.S. TAKE AGAINST IRAN IN RETALIATION?

TIMELINE TO MURDER: HOW THE PLOT ESCALATED