Alleged plot reflects Middle East rivalries
The details are dizzying. An international plot involving Iranian men linked to the feared, secretive al-Quds force, a Mexican drug cartel, $1.5m, guns-for-hire and the Saudi ambassador in the US as a target.
The FBI director Robert Mueller said it read like a Hollywood script but with real implications. Beyond the specifics of the alleged plot, it will also have diplomatic repercussions.
The choice of ambassadorial target is a direct expression of the acerbic tensions in the Middle East between Saudi Arabia, a key US ally, and Iran.
They are both vying to maintain regional influence and have been fighting a proxy war for years in places like Lebanon. Fear that their diplomats might be killed by Iranian operatives is reportedly one reason why the Saudis have resisted appointing an ambassador to Baghdad.
The Arab uprisings have only exacerbated that competition.
In March, the Sunni kingdom of Saudi Arabia sent troops into Bahrain to help the Sunni rulers in Manama quell a popular uprising, driven mostly by the large Shia population demanding equal rights. The Saudis and the Bahrainis said the unrest was being fomented by Shia Iran.
For its part, Iran is feeling the pinch of sanctions but also worries about the impact of the uprisings in the region. While Iranian leaders have gloated that Arabs are rising up against US-backed dictators in the region, they have occasionally expressed concern the uprisings could benefit the US. Iran is also anxious about the popular revolt in Syria, its only ally in the region.
When they made the plot public, American officials said the US would not allow other countries to use American soil as their battleground.
But the US too is part of the competition in the Middle East and countering the influence of Iran, its long-time foe in the region, is a constant preoccupation. Washington has accused the Quds force of being behind the killing of American troops in Iraq.
But why would any faction in Iran want to conduct such an operation on US soil with the risk of retaliation it entails?
Perhaps they thought that the Mexican drug cartel would be enough to cover their tracks.
But Iran's politics are also opaque: the civilian and military leaderships are divided and have different motivations. The Quds force may have operated without the knowledge of President Mahmoud Ahmadinejad.
Most Iran experts believe the Supreme leader Ayatollah Ali Khamenei would have known about the operation but rogue and more radical elements within the Quds force could also have acted independently.
Speculation is rife but whoever planned this would have been plotting 10 steps ahead of the US, anticipating Washington's reaction in their cost-benefit analysis.
Whenever terror plots are disclosed by US officials, some observers express scepticism about how serious the threat really was, especially since the planning seemed somewhat sloppy.
Iran said the accusations were fabricated.
But it is difficult to see how the US would benefit from playing up a plot of this kind, when it risks only furthering the instability in the Middle East.
For now, Hillary Clinton said the US was consulting with its friends around the world to send a strong message to Iran and further isolate it. It's likely that Washington's response will be measured so as not to add fuel to the fire in a region already dealing with tremendous upheaval.
On Tuesday, Mrs Clinton called the Saudi Foreign Minister Saud el-Faysal to discuss the plot but a senior American official also said they "committed to work together to hold Iran to account".
Saudi Arabia will be much more vocal in its demands for a tough response against Iran.
According to leaked US diplomatic cables revealed by Wikileaks, the Saudis have often exhorted the US to attack Iran. Riyadh is concerned about Tehran's nuclear ambitions, perhaps even more than Washington.
In a meeting in Riyadh in 2008 with top American officials, including General David Petraeus, who is now the CIA chief, the Saudi ambassador to the US Adel Jubair, the target of the alleged plot, quoted the Saudi king as saying: "He told you to cut off the head of the snake."