THE United States says it has busted a plot conceived at high levels of Iran’s revolutionary leadership to kill the Saudi envoy to Washington in a major terror attack, and vowed to hold Tehran to account.

Injecting an explosive new element into the showdown between Washington and the Islamic Republic, the Justice Department has charged two men with conspiring with factions of the Iranian government to carry out a deadly plot to blow up Saudi Ambassador Adel Al-Jubeir on American soil.

The criminal complaint named Manssor Arbabsiar, a 56-year-old naturalised US citizen holding both Iranian and US passports, and Gholam Shakuri, an Iran-based member of Iran’s Quds Force, in the plot.

Shakuri remains at large, Justice Department officials said.

Arbabsiar was arrested on September 29 at New York’s John F Kennedy International Airport and was to appear in court in Manhattan today.

 FBI director Robert Mueller said the case “reads like the pages of a Hollywood script”.

“(But) the impact would have been very real and many lives would have been lost,” he said.

The plot was infiltrated by a a US drug enforcement informant posing as a member of the Zetas Mexican drug cartel. The plotters planned to pay $A1.5 million to the cartel to carry out the attack.

“The complaint alleges that this conspiracy was conceived, was sponsored, and was directed from Iran and constitutes a flagrant constitution against the law from protecting diplomats from being harmed,” said Attorney General Eric Holder.

“In addition to them being held accountable for their plot, the United States is committed to holding Iran accountable for its actions.

“The organisation that I reference in my warrant is a component of the Iranian government.

“It was directed and approved by the senior members of the Quds force and the Iranian military. High-up officials in those areas were responsible for this plot.”

Mr Holder said the plot was “conceived, sponsored and directed from Iran.”

News reports said the plot also included a bomb and subsequent bomb attacks on the Saudi and Israeli embassies in Washington.

The case, called Operation Red Coalition, began in May when an Iranian-American from Corpus Christi, Texas, approached a US informant seeking the help of a Mexican drug cartel to assassinate the Saudi ambassador, according to counter-terrorism officials..