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The FBI has foiled plans to assassinate the Saudi Arabian ambassador to the United States, U.S. federal law enforcement officials said Tuesday.

Iranian operatives had allegedly engaged a Mexican drug cartel to carry out the $1.5 million assassination plot, Attorney General Eric Holder said. Adel A Al-Jubeir is listed as the current Saudi Arabian ambassador on the country's website.

Charges have been brought against Manssor Arbabsiar, 56, a naturalized U.S. citizen who also holds an Iranian passport, and Gholam Shakuri, who was identified as an Iran-based member of Iran's Quds Force special unit of Iran's Revolutionary Guard.

Arbabsiar was arrested on Sept. 29 at New York's John F. Kennedy International Airport, and was to appear in court in New York later Tuesday. Shakuri was still at large.

"The complaint alleges that this conspiracy was conceived, sponsored and directed from Iran, in flagrant violation of U.S. and international law," Holder said. "The U.S. is committed to holding Iran accountable for its actions."

Tehran denied the charges, calling them a "new anti-Iran scenario," according to an unnamed official quoted by the official news agency IRNA.

Another Iranian news agency Mehr called the U.S. charges "ridiculous," and described them as a "new round of psychological war against Iran." No officials were quoted in the Mehr commentary.

The U.S. has long designated Iran as a state sponsor of terrorism, and in 2007 issued sanctions against the Revolutionary Guard and its members for terrorist activities. Among other actions, the U.S. has charged that the Guard was behind many of the terrorist attacks in Iraq, and against U.S. forces there.

The charges will likely escalate tensions with Iran less than a month after Tehran released two U.S. hikers who had been jailed for more than two years on trumped-up charges of spying. Arbabsiar was arrested just eight days after their release.

But Holder dismissed a reporter's question about whether the Justice Department delayed announcement of the charges until the hikers were released, in coordination with the State Department.

"The case was brought as the facts dictated," Holder said.

U.S. officials hinted that massive deaths -- up to 150 -- could have resulted from a bombing attack on the ambassador, perhaps in a restaurant. But Preet Bharara, US attorney for the Southern District of New York, where charges were brought, conceded that the plot had not advanced to the point of purchasing explosives or mapping out an actual attack.

The plot was apparently revealed through the work of a "confidential informant" from the U.S. Drug Enforcement Administration (DEA), who first met with Arbabsiar in Mexico in May. The informant posed as an "associate of a violent international drug-trafficking cartel," Holder said.

Arbabsiar then wired about $100,000 to a U.S. bank account as a down payment for the assassination, Holder said. Mexican authorities cooperated in the investigation.