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THE SITUATION ROOM

Alleged Plot to Kill Saudi Ambassador Foiled; Interview With Michigan Congressman Mike Rogers; Iran Possibly Behind Assassination Attempt

Aired October 11, 2011 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, HOST: Happening now, breaking news: an alleged Iranian plot to assassinate the Saudi ambassador to the United States, two men now charged. One is due in court this hour.

We're also following reaction this hour from Tehran to Riyadh to the White House and beyond. Our correspondents around the world are standing by.

And the United States is vowing to Iran accountable, but how? We're working all angles of this major breaking news story right now.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: We're also awaiting a statement by the secretary of state, Hillary Clinton. She's about to make a statement to the news media on all of the breaking news, an alleged terror plot by Iran to assassinate the Saudi ambassador to the United States.

The Justice Department says Iranian agents were seeking help from a purported Mexican drug cartel to carry out the killing and the FBI and the DEA busted the plot wide-open.

The attorney general of the United States, Eric Holder, gave details just a little while ago.

(BEGIN VIDEO CLIP)

ERIC HOLDER, U.S. ATTORNEY GENERAL: Today, the Department of Justice is announcing charges against two people who allegedly attempted to carry out a deadly plot that was directed by factions of the Iranian government to assassinate a foreign ambassador here in the United States. Manssor Arbabsiar, a nationalized United States citizen who holds an Iranian passport and was arrested last month in New York, is accused of working with members of an arm of the Iranian Revolutionary Guard Corps to devise an international murder-for-hire scheme targeting the Saudi Arabian ambassador to the United States.

According to the complaint filed today in the southern district of New York, Arbabsiar is alleged to have orchestrated a $1.5 million assassination plot with Gholam Shakuri, an Iranian-based member of the Quds Force, and other Iranian co-conspirators. Now, the Quds Force is a unit of the Iranian Islamic Revolutionary Guard Corps. It is also suspected of sponsoring attacks against the coalition forces in Iraq, and was designated by the Department of Treasury in 2007 for providing material support to the Taliban and other terrorist organizations.

The complaint alleges that this conspiracy was conceived, was sponsored, and was directed from Iran, and constitutes a flagrant violation of U.S. and international law, including a convention that explicitly protects diplomats from being harmed. In addition to holding these individual conspirators accountable for their alleged role in this plot, the United States is committed to holding Iran accountable for its actions.

Arbabsiar and Shakuri are charged with conspiracy to murder a foreign official, conspiracy to use a weapon of mass destruction, and conspiracy to commit an act of international terrorism, among other charges. Arbabsiar has been in custody since September the 29th, 2011, while Shakuri, based in Iran, remains at large.

Now, according to the complaint, earlier this spring Arbabsiar met with a confidential informant from the Drug Enforcement Administration who was posing as an associate of a violent international drug trafficking cartel. The meeting, which took place in May, and in Mexico, was the first of a series that would result in an international conspiracy by elements of the Iranian government to pay the informant $1.5 million to murder the ambassador on United States soil, according to documents that we filed today in court.

According to the complaint, those discussions led Arbabsiar, with Shakuri's approval, to facilitate the wiring of approximately $100,000 into a bank account in the United States as a down payment for the attempted assassination. The complaint also states that in the days since the defendant's arrest, he has confessed to his participation in the alleged plot, as well as provided other valuable information about elements of the Iranian government's role in it.

The disruption of this alleged plot marks a significant achievement by our law enforcement and intelligence agencies, as well as the close cooperation of our partners in the Mexican government.

(END VIDEO CLIP)

BLITZER: Attorney General of the United States Eric Holder.

Let's go straight to the State Department.

Our foreign affairs correspondent, Jill Dougherty, begins our coverage this hour, the breaking news we're watching unfolding.

And, Jill, beyond the plot that's alleged in this lengthy statement that the Justice Department ruled -- we're also getting and I want you to clarify other information quoting senior officials suggesting that there was another plot not included in this set of arraignment, if you will, set of documents, targeting not only the Saudi ambassador, but the Israeli ambassador and the Israeli Embassy here in Washington as well.

Is that true? JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Right, Wolf.

That's the information. Now, how far along in that plot they actually were is unclear. But they were apparently discussing or considering attacking or hitting the Saudi ambassador, the Saudi Embassy here, and then also perhaps -- and the Israeli Embassy or ambassador and also not only here in Washington, but in Buenos Aires, Argentina.

Now, again, this is not specific. It is not apparently in that legal complaint, but it was allegedly something that they were discussing.

BLITZER: And we're also hearing that the secretary of state, Hillary Clinton, is about to make a statement on this very subject.

I know the U.S. is getting involved in dealing with other countries to try to put more pressure on Iran, but what do we know about what the secretary is about to say? We're looking at live pictures coming from one of the diplomatic rooms over there at the State Department.

DOUGHERTY: Well, if I were to make an educated guess, I would say that she would want to send a message to other countries that, number one, this is what happened, that it is outrageous in the view of the United States, and that the other countries have to join together with the United States to take action against Iran.

Now, what kind of action? We know that the Treasury Department is going to be targeting for more sanctions five individuals who are allegedly tied to this plot. We know, Wolf, that there are a lot of sanctions against Iran right now, including against individuals.

But what they're going to try to do is put the squeeze on individuals who could be connected to the Quds Force. And that is the group you know very well that is tied very tightly, it's military, but it's also paramilitary -- it's also tied to the entire economy of Iran.

So what they want to do is really hurt them, and they really want to get back because this, they say, is extremely serious.

BLITZER: And I just want to clarify, Jill, the reports we're getting was that the Saudi Embassy would also be targeted and the Israeli Embassy would be targeted. There was some discussion of that, not necessarily the Israeli ambassador to the United States, Michael Oren, himself, is that right?

DOUGHERTY: Wolf, a little bit unclear. I would say that they were thinking about or considering some type of action against either the embassy or the ambassador himself.

Now, in this case here in Washington, we do know that the allegation is that there was a direct and amazing plot. In fact, remember Robert Mueller just a short time ago described it as almost a Hollywood script in terms of how it was supposed to unfold.

BLITZER: And if you read this document that the Justice Department released, it says the ambassador was going to be targeted at a popular restaurant here in Washington that he liked to attend, and it didn't make any difference if a lot of innocent people who were at that restaurant would be killed at the same time. That's the allegation included in the document.

DOUGHERTY: Absolutely, and that they were going to do this by contacting, and they allegedly did contact a person who was supposed to be, they understood, part or connected to a Mexican drug cartel, but in reality was a DEA, Drug Enforcement Administration, source, and an informant.

And so that is how it was revealed. That DEA then told the FBI and then they went in and stopped the plot. So as we know they have arrested one person, Arbabsiar, who was a person who was in the United States. He's a naturalized citizen, holds two passports, Iranian, American. He is arrested.

But the other person implicated, Gholam Shakuri, is actually in Iran. He has not been caught.

BLITZER: He remains at large, as they say.

All right, Jill, stand by.

Mike Rogers is the chairman of the House Intelligence Committee. I believe he's been fully briefed on this development.

Chairman, thanks very much for coming in.

REP. MIKE ROGERS (R-MI), CHAIR, HOUSE INTELLIGENCE COMMITTEE: Thanks, Wolf. Thanks for having me.

BLITZER: All right, give us your sense. Is this a big deal, a modest deal, a little deal? What's going on here?

ROGERS: Well, this is a huge deal. And this was briefed to me as chairman and the ranking member back in the middle of the summer as it started to unfold.

I agree with the director of the FBI. It seemed a little bit Hollywood. It just almost seemed implausible that Iran would take this very serious next step and contract somebody they believed had access to the United States, transfer money for the operation to begin to kill the Saudi ambassador on U.S. soil here in Washington, D.C., and with the discussion of collateral damage not being an issue, meaning civilians could be killed.

And you think about we have been talking over the last few months about Iran being the most aggressive state sponsor of terror in the world, and now stepping it up. I mean, they have got more blood on their hands than most of the terror organizations on the State Department's terror list, and that's what makes this so serious and it means that we're going to have to take steps to let Iran know that we will not tolerate this behavior.

BLITZER: Well, what does that mean, take steps? The U.S. already has enormous sanctions imposed on Iran. What else, short of military action, is the Obama administration supposed to do? ROGERS: Well, the first interim, I believe, is that we have got to get the IAEA. You know, they're certainly cheating on their nuclear weapons program. They have said it themselves. They have given the stiff-arm, and they think that they have world position with them.

I think this clearly shows that they're going to lose that, so we need a more aggressive IAEA to put pressure on their developing of their nuclear weapon program. We need the Europeans to really step up to the plate, and this is their opportunity. They can no longer stand aside and watch Iran take this kind of action.

And they know of their past bad behavior. This is a significant line that they have crossed. So I think this is an opportunity for the administration to get the Europeans on board and send a very clear message to the Chinese and the Russians, listen, this isn't about your own regional self-interest. This is about a nation state who has gone and crossed the line, boundary, when they're talking about committing acts of terror, supporting acts of terror in another country like the United States.

BLITZER: Eric Holder, the attorney general, Robert Mueller, the FBI director, they were both very precise in saying elements of the Iranian government were involved in going through and plotting this alleged assassination attempt against the Saudi ambassador.

What does that mean, elements? Do you believe, for example, that the highest elements, including the president of Iran, Mahmoud Ahmadinejad, personally authorized the assassination of the Saudi ambassador?

ROGERS: I can't say right now because of the nature of the information and how it was obtained, but I will tell you this. I have a very high degree of confidence that this was Iranian government- sanctioned event.

BLITZER: So that Mahmoud Ahmadinejad himself probably knew about it, is that what you're saying?

ROGERS: You can imagine something this significant, committing an act of terror on a foreign soil, I can say again with high confidence I believe it was an Iranian government-sanctioned event.

Sorry. I don't mean to be cute on you, Wolf.

BLITZER: No, I understand.

ROGERS: But we need to be careful as this unfolds.

But, again, as a former FBI agent myself, it's a little shocking to see. At the level of the transaction, the amount of the money, the quickness of the decisions that were made in order for certain elements of this to fall into place tells us that it is clearly tied to the highest levels of the Iranian government.

BLITZER: And what can you tell us about these other reports we're getting that the Israeli Embassy here in Washington, maybe the Saudi and Israeli embassies in Buenos Aires in Argentina were also on the Iranian alleged hit list? What can you tell us about that?

ROGERS: Well, you can imagine, if they're this aggressive -- now, remember, they went to recruit somebody and but for the good fortune happened to be working for the Drug Enforcement Administration at the time.

They went to contact this person because of their connection to the drug cartel. So during the course of that development, and they believed -- and this is a very, very, very, very, very credible source. They believed, the Iranians believed through their cutout that they had somebody who had great access, who had access to explosives and firearms and an organization that would allow them to pull it off.

So during the course of that, you can imagine the kinds of discussions that may have happened during the course of those meetings that would lead certainly the attorney general and the FBI to publicly state, hey, guess what, they had other targets on their list.

And we do know, again, that Iran is one of the senior and most aggressive state sponsors of terror. They have killed U.S. soldiers, at least been responsible for putting weapons systems into the theater in Iraq and we believe in Afghanistan that's taken the lives of U.S. soldiers.

This is really an intolerable place for them to be. And given all of those discussions and seeing the operational affirmative action here, if you will, that got this thing going, I can tell you that it raised lots of concerns about those targets they talk about, the Israeli Embassy, other targets outside of the United States, to the point where these countries, these ambassadors were brought in and briefed about security precautions they may want to take.

BLITZER: Do you have a good understanding -- obviously, everyone knows about the enmity between the Iranian regime and the Israelis, but why target Saudi Arabia, a Muslim -- another fellow Muslim country? Iran is not an Arab country, but it's a Muslim country. The Saudis are a Muslim country.

What was going on here? Was this a long, planned-out operation, do you believe, or was it something that just occurred in the last few weeks or months?

ROGERS: Well, you have to understand, the Saudis do not want the Iranians to get nuclear weapons. They feel that is such a destabilizing event in the Middle East that it will cause huge amounts of trouble.

And so they have been cooperating with the international community to that end, to try to stop Iran from actually acquiring nuclear weapons, which is their expressed desire.

They have also watched as Iran has used Syria as a proxy state, Hezbollah, that doesn't always have the best intentions to Sunni Arabs in the Middle East. And so you have all of these combinations kind of coming to a head. And because of some differences they have had along the way, and Iran is feeling more emboldened. Remember, they feel they've been successful in Iraq by introducing weapon systems that have killed Americans and in Afghanistan.

They feel they have been successful in giving the stiff arm to the international community on their development of nuclear weapons. They feel like they are rising in a pretty chaotic Middle East, let alone world, and so they become brazen in their attempt to say we are going to show the world that we can dominate world and influence world affairs, not just in the Middle East but beyond.

And all of that I think was coming into play here And I think they believe that this was in their interests to have this assassination here in the United States. To them it was a two-for. You get rid of the Saudi ambassador and say, see, we'll strike you anywhere in the world, we have that capability.

And, B, it embarrasses the United States because it happened on U.S. soil. That was just an added benefit for them.

So you can think-kind of see the way they have been thinking about putting this together and how dangerous it really is.

BLITZER: One final question, Mr. Chairman, before I let you go.

The use of someone involved in the Mexican drug cartel, was that supposed to be what they all a cutout to protect in case it came out the allegation could be the drug cartel was killing the Saudi ambassador, not Iran, to have a little distance between Iran and the assassination? Is that your understanding?

ROGERS: Oh, absolutely. This is not something they necessarily would have necessarily ever publicly taken credit for, but believe me--the right people in their minds would have known about this particular operation.

But it was a cutout on a cutout. That's what made this a very sophisticated, and why many argue, and I believe that it had such close ties to the hierarchy of the republican guard and up in their government because it was a very sophisticated event.

This is not something that a small group of terrorists could have tried to put together that were rogue inside of Iran. This was a very long -- it was deliberate, they were planning all of the contingencies and so they had a cutout on a cutout happening out of Mexico City.

So you can think about how much planning went into this. And they were going to use what they saw as a real weakness for the United States, the rise of these drug cartels as a cover, if you will, for their operation. But for the fact that this person was a DEA source could have gotten a lot farther before discovered.

BLITZER: Mr. Chairman, as you point out and as the FBI director, Robert Mueller, points out, this could have been a movie thriller, if you will. It's got all that drama, all that intrigue, all that potential death. We'll stay in close touch with you. Mike Rogers, the chairman of the House Intelligence Committee.

Thanks very much.

ROGERS: I was just going to say this was a movie with a happy ending, though.

BLITZER: Well, I suspect the story is not over with yet. There's more going to come out so let's see what happens in the days and weeks to come.

Mr. Chairman, thanks very much.

ROGERS: Thanks Wolf.

BLITZER: I want to alert our viewers in the United States and around the world, we're awaiting the Secretary of State, Hillary Clinton, she's about to make a statement on what is next as far as U.S. retaliation against Iran for this alleged plot.

Also, the suspect, Manssor Arbabsiar, he is expected in court, in New York, this hour. We have live coverage. Jason Carroll is on the scene. Much more of the breaking news right after this.

(COMMERCIAL BREAK)

BLITZER: We're following the breaking news this hour. An alleged plot by Iran, high elements in the Iranian government, to assassinate the Saudi ambassador to the United States, Adel al Jubeir.

We're just getting a statement into THE SITUATION ROOM from the Saudi Embassy here in Washington. Let me read it in full to our viewers in the United States and around the world.

"The Royal Embassy of Saudi Arabia would like to express its appreciation to the responsible agencies of the United States government for preventing a criminal act from taking place. The attempted plot is a despicable violation of international norms, standards and conventions and is not in accord with the principles of Humanity."

There's a statement from the Saudi Embassy in Washington.

You're looking at pictures of Adel al Jubeir, the Saudi ambassador to the United States, Someone who's been deeply involved in U.S./Saudi relations for many years.

Let's bring in CNN's Reza Sayah. He's watching all of this unfold, in Islamabad.

Reza, you've covered Iran for many years You know what's going on. Give us your immediate thought when you heard the United States government make this very serious allegation that elements of the Iranian regime, the Quds Force specifically, part of the Iranian revolutionary guard corps, was directly plotting to kill Adel al Jubeir, the Saudi ambassador.

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Wolf, I was somewhat surprised because this doesn't fit the Iranian regime's MO. The U.S. has certainly in the past accused of Iran being a state sponsor of terrorism, of supporting groups like the Hezbollah, that Washington views as a terrorist organization, but Washington has never directly accused the Iranian government of being involved in a plot like this to go after a foreign diplomat on U.S. soil

But I give you better than my thoughts, I'll give you the thoughts of the Iranian President, Mahmoud Ahmadinejad's spokesperson, Ali Akbar Javanfek. It's past midnight in Iran but we've managed to speak to him a couple of times and he strongly and at times mockingly has denied these allegations.

Here's what he said and this is a quote. "This is a child's story. It's not the first time America has come up with a story like This. Americans are facing domestic problems at home and this is an attempt by them to distract the public by trying to convince them that there is an outside threat."

He went on to say from their perspective this is a fabrication and America has become an expert at making false allegations against other countries .

So a strong denial by the Iranian regime. And again in what is a very serious allegation but a surprising allegation in that it's unprecedented. Washington has never accused Iran of being involved in a plot like this.

A lot of questions remain as to what this plot was. If and how these factions of the Iranian government were involved but this is certainly an allegation that is going to make a lot of headlines as it has already.

BLITZER: We've been doing some checking with the State Department, with the U.S. government on earlier allegations, Reza, of supposed Iranian direct involvement in terrorist operation outside of Iran beyond Hezbollah or the Palestinian organizations, Hamas, for example. And they have got a whole list of what they accuse Iran of being involved in going back to the '80s.

The 1988 kidnapping and murder of Colonel William Higgins, a U.S. Marine involved in the U.N. operation in Lebanon; the 1992 and 1994 bombings of Jewish cultural institutions in Argentina, the 1996 truck bombing of the Khobar towers, U.S. military residents in Saudi Arabia.

They have got a whole bunch including more recently in Iraq, they say Iran was directly involved in plotting to kill American troops in Iraq. So they have got a whole list of why they say Iran is the world's leading state sponsor of terrorism. But go ahead.

SAYAH: Those accusations are well documented. But you notice that none of them are on U.S. soil. This one is, and that's what makes this particular allegation different. And I think the very important question to ask is if indeed Iranian leaders, President Mahmoud Ahmadinejad, the Quds, Force, the revolutionary guard got together and decided let's carry out a plot like this, targeting the Ambassador of Saudi Arabia in the U.S.

What would they gain by being part of this plot and carrying out a plot like this. I think a lot of people are going to be of the view that they would have a lot to lose, more to lose than to gain, not the least of is the ire of the American government. And the fact is if the Iranian government wants to go after U.S. targets, they have plenty of opportunities in the Middle East, in Iraq, in Afghanistan. And I think the big question is if indeed they did plot to attack the embassy of Israel, the Saudi Arabian ambassador. What did they have to gain?

And another thing to remember is these are two countries that have been going at it in an information war too. These are two governments with leaders who plenty of times have accused one another and those accusations, those allegations either didn't turn out to be true or didn't turn out to be as serious as first thought . I think it's very important to wait for the details to come out and certainly for the trial.

BLITZER: Good point indeed. It's one thing to go after targets outside of the United States, it's another thing to target the Saudi ambassador allegedly right here in Washington.

Reza Sayah, stand by, we'll be getting back to you.

Let's get some more now on the target of this alleged Iranian assassination plot. We're talking about the Saudi ambassador to the United States, Adel al Jubeir. He's lived here in Washington for several years. He's held various positions in the embassy before becoming Saudi Arabia's ambassador, back in 2007. He's very close to King Abdullah, one of his key advisors.

Adel al Jubeir, by the way, is 49 years old, a graduate of the University of North Texas in 1982 with degrees in political science and economics. He then received a masters degree from Georgetown University here in Washington in 1984.

He's been a frequent guest on CNN over the years. He's someone we know very, very well over the years. He's been directly involved in trying to promote closer U.S. Saudi relations. I got to know him personally when he was the national security adviser to the then crown prince of Saudi Arabia, Crown Prince Abdullah, who now is King Abdullah of Saudi Arabia as I point out, very close to King Abdullah. He's flying from Washington to Saudi Arabia almost every other week to brief the king personally on the latest developments.

Let's continue our breaking news coverage right now with our national security contributor, Fran Townsend. She serves on the external advisory boards of both the CIA and the homeland security department as well as our CNN contributor the former FBI assistant director Tom Fuentes.

I want to get to both of you in just a moment, but I'm just learning that Jason Carroll is outside the court house in New York where the suspect, Manssor Arbabsiar, is about to be arraigned I believe in this courthouse.

Jason, what do we know?

JASON CARROLL, CNN CORRESPONDENT: Well let me just set the scene for you here, Wolf. Basically this was a procedural sort of event what we saw at the courthouse here today. And we got our first look at Manssor Arbabsiar . He wore blue jeans, he wore a blue plaid shirt, he was basically looking somewhat relaxed as he entered the courtroom. He spoke briefly with his attorney before the proceeding got under way again.

This was more procedure more than anything. Arbabsiar was not required to enter a plea during the proceeding and he did not. The judge did at a certain point did advise Arbabsiar of his rights. For instance, telling him that his statements could be used against him. Also his right to be represented by an attorney.

The defense also saying that they had -- that they had reviewed the federal complaint, the criminal complaint which alleges, as you know, among a number of things conspiracy to commit murder against a foreign official, conspiracy to use a weapon of mass destruction, also conspiracy to commit an act of terrorism.

Also, according to the complaint, Arbabsiar did confess to the allegations while being interviewed. Again, Wolf, just want to make clear this was not an arraignment, this was more procedural more than anything. Another court date has been set for October 25th, I believe. Yes, October 25th.

Again, Arbabsiar did not make any sort of statements during this proceeding. At one point his attorney let the judge know that there are some -- there's some sort of medication that he'll be needing while he's being detained. That paperwork went through. So this was procedural more than anything. I suspect on October 25th that is when we will be hearing more from Arbabsiar.

BLITZER: Other than wearing a baseball cap, what did he look like? Describe a little bit of what this suspect looked like.

CARROLL: It was interesting. As you know, he's 56 years old. Again, he was wearing a blue plaid shirt, blue jeans, brown shoes, seemed very casual, salt and pepper hair. He looked -- and this is just from a personal opinion. He looked just like any average man that you would see on the street, Wolf, nothing that stood out about him. He just looked just like any average man that you would see on the street, salt and pepper hair, clean shaven. That's really pretty much the best way you can describe this man at this point.

BLITZER: Was this a court-appointed attorney he has or somebody hired?

CARROLL: Yes. This was a federal court-appointed attorney. Obviously he's going to have an opportunity to meet with her, discuss more about what will be going on. This is Sabrina Schroff. She will be representing him from this point on. But once again according to the criminal complaint he has confessed to many of the allegations that are being set forth against him. So it will be interesting to see what sort of defense he'll be coming up with.

BLITZER: And we're showing our viewers a picture of Manssor Arbabsiar, the suspect in this case, the man who allegedly plotted to assassinate the Saudi ambassador to the United States, Adel al Jubeir. There he is. That's from the Corpus Christi, the sheriff's department in Texas where he was living for these several years, a naturalized U.S. citizen as well as a dual Iranian citizen.

Manssor Arbabsiar, there he is, the picture of the suspect. I don't know if you can see that suspect, Jason, but he seems to have dark hair, no salt and pepper. Maybe this is an older picture of Manssor Arbabsiar, but it may have been taken a few years ago.

CARROLL: Let me just add something. I cannot see the picture there, but I can tell you he does have salt and pepper hair. I was sitting in the second bench, the second row there in the courtroom, I would say just about eight feet from him. He definitely has salt and pepper hair at this point, somewhat of a receding hairline, balding in the back, in the top and the back of his head. Once again, I cannot seat picture that you're looking at but I did see the man in the courtroom today.

BLITZER: Maybe he colors his hair and didn't have it colored over the last few weeks and that's why he looks different today than he did in that picture that the Corpus Christi sheriff's department has released. Jason, stand by. You'll give us a little bit more flavor of what happened inside that courthouse behind you. I want to bring in Fran Townsend, though. Fran, walks us through the enormity of why this is, as Mike Rogers, the chairman of the House intelligence committee says, a huge deal?

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: It's a huge deal. The Iranians has clearly sanctioned at a very high level. It includes the head of Quds force, the individual they identify as the head of this particular operation. Wolf, you don't get that without having had some electronic surveillance as well as the informants identified in the complaint.

So that's why I think, I suspect based on my own experience you have something like Mike Rogers saying he's very confident that this was sanctioned at the highest levels. That really does suggest a whole new low in the relationship between the Iranians and the Saudis.

Look, the Saudis understood this enmity because for the longest time they didn't post an ambassador in Iraq after there was a government there because they were afraid the Iranians would come into Iraq and assassinate their ambassador were.

You have the Haj coming up where there are millions of pilgrims who come from around the world. The king of Saudi Arabia is referred to as the custodian of the two holy mosques. And so there are many Iranians who will want to come to Haj. And it's always a security concern. Will they use pilgrims as cover to get Quds force in there to foment unrest?

This is a real sign of extraordinary tension between these two countries and in the region. Adel al Jubeir because of his relationship, Wolf, as you know for many years to the current king of Saudi Arabia, who's been very ill, is a direct sort of shot, if you will, at the king. I mean, clearly if they wanted to get someone very close to the king, Adel al Jubeir was the guy you would target. Given the freedoms here in the United States that we enjoy, it's an easier place for them to operate.

And so I think this causes real tensions. I expect we'll hear Secretary Clinton say this is going to have to go to the U.N. Security Council. And those who have been reluctant to impose tougher sanctions on Iran like Russia and China will be under enormous pressure now. There's no disputing that Iran is a state sponsor of terror with the revelations that we've heard today.

BLITZER: I don't want our viewers to be under any illusions. The relationship, as Fran points out, between Adel al Jubeir and King Abdullah of Saudi Arabia is incredibly close, has been for many years, almost like a father-son relationship. Indeed, that may have played a role in the plot to assassinate him.

Tom Fuentes, formerly of the FBI and now a CNN contributor is here as well. The whole Mexican cartel involvement in this, based on what you know, was that just coincidental that there was an informant working in this Mexican drug cartel that happened to be working also for the FBI?

TOM FUENTES, CNN CONTRIBUTOR: We don't know that yet, Wolf, but it could be. It could easily be that or that they had other intercepts from overseas that led them to try to get that informant introduced to the subject. I'm sure we'll find that out in the days ahead.

But the idea of using the Mexicans is pretty sound. You have thousands of murders being committed daily almost in Mexico. You have a group like Zetas operating in northern Mexico that are trained former Mexican special forces troops that went rogue. So their ability through their cross-border connections into the United States, their drug distribution networks into the United States, it would be very easy for the cartels to ship explosive explosives, weapons, assassins, anything they need across the border into any part of the United States they chose.

BLITZER: But are they open to be hired by the Iranians to go ahead and assassinate the Saudi ambassador to the United States, these elements of the Mexican drug cartel? Is that something, part of their usual job performance, if you will?

FUENTES: I don't think it's usual but part of their job performance is they are an organized crime group committed to making money in any way possible. So the idea of assigning this to a cup el of their people to go carry this out for a million and a half dollars, it could be. We don't know that for sure. But there are plenty of people in Mexico or in the United States for that matter available for hire to carry something like this out so they would be the cutout or the double cutout as Mike Rogers said to try not to have this come back to the Iranian government.

BLITZER: Briefly explain what a cutout and a double cutout means. If you've read spy thrillers over the years, you know, but a lot of our viewers may not be familiar with the term.

FUENTES: The idea is if the person that commits this act is killed at the time of the act or is captured, then it looks like the Mexican drug cartel had some issue with the Saudi government and wanted to do this. So it doesn't come back to Iran. So if they can cut out at least once if not twice so that maybe the actual person who's the assassin has no clue who hired him.

So if the informant had been an actual member of Los Zetas, he would know that he's meeting with an Iranian subject. But when he goes to the cartels, they would only know they are hired by him. They would not know Iran or any other country sponsored it, so it would be much easier for Iran or any other government to deny any involvement in the assassination.

BLITZER: Tom Fuentes stand by, Fran Townsend stand by as well. The U.S. government is alleging that high elements of the Iranian government were directly involved in planning the assassination of Saudi Arabia's ambassador to the United States, Adel al Jubeir, and may also have been involved in plots to bomb the Saudi embassy in Washington, the Israeli embassy in Washington, as well as the Saudi and Israeli embassies in Buenos Aires, Argentina.

Much more of the breaking news coverage right after this. (COMMERCIAL BREAK)

BLITZER: We're following the breaking news of the alleged Iranian terror plot to assassinate the Saudi ambassador to the United States, Adel al Jubeir. How are the Saudis reacting to all the breaking news. CNN's Mohammed Jamjoom is monitoring what's going on and joining us from Abu Dhabi. What are you picking up from over there, Mohammed?

MOHAMMED JAMJOOM, CNN INTERNATIONAL CORRESPONDENT: Well, not a lot of reaction beyond the statement you read a short while ago. I spoke to a Saudi government official just a few moments ago and he said the statement from the embassy would speak for itself. I pressed a little further and asked does this mean there will be an escalation as far as any military action, as far as what the Saudis might plan, what are they trying to do?

He said right now no comment on that. They just are going to let the statement from the embassy speak for itself. But we expect to hear more from the Saudis and more from the Saudi press once day breaks here tomorrow. We're now in the middle of the night. Once day breaks, we expect to hear much more from Saudi officials on this rapidly developing story.

BLITZER: Mohammed, let me just read for our viewers the statement, carefully crafted statement from the Saudi embassy here in Washington that was just released. "The royal embassy of Saudi Arabia would like to express its appreciation to the responsible agencies of the United States government for preventing a criminal act from taking place. The attempted plot is a despicable violation of international norms, standards, and conventions, and is not in accord with the principles of humanity," that statement coming out from the Saudi embassy. You're looking at pictures of the Saudi embassy here in Washington.

A lot of our viewers are confused, and understandably so. They know Iran is a Muslim country, Mohammed, they know Saudi Arabia is certainly a Muslim country. Why would the Iranians allegedly target Saudi Arabia's ambassador for assassination?

JAMJOOM: Well, Wolf, what's key here to try to understand is that Saudi Arabia and Iran are foes here in the region. They see each other as each other's biggest enemy here in the region. And they're locked in this battle for regional dominance. Saudi Arabia is a Sunni country. Iran is a Shiite country. So you already have that. They're at opposite ends of the spectrum when it comes to that, a sectarian divide.

You also have to look at the Arab spring, things that have escalated the tension between Iran and Saudi Arabia. It's long been known there's tension between these two countries. But if you look at just the issue of Bahrain, once the protest movement, the anti-government started and really got under way in Bahrain, what happened there, the Gulf countries here, the Arab countries thought Iran was try to foment unrest in Bahrain because it's 70 percent Shiite population with Sunni leadership.

Saudi Arabia, other Gulf countries sent into troops into Bahrain to support the ruling family there, the government there. Iran was not happy about that. They saw that as a threat to them.

But the Gulf countries, the GCC, Saudi Arabia, United Arab Emirates, other countries, all said Iran was trying to foment unrest in Bahrain so even a tiny country like Bahrain, which is a pivotal country in this region, could spark a lot more tension and really a boiling over the tensions between Saudi Arabia and Iran.

So it's really something that goes back a long way and in recent months the relationship has only gotten a lot worse -- Wolf.

BLITZER: All right, Mohammed, thanks very much. Mohammed Jamjoom is reporting for us from Abu Dhabi and he's supposed to be monitoring the Saudi reaction. We'll check back with him.

One of the alleged conspirators is a member of Iran's notorious Quds force, which the United States has accused of backing terrorists. Our Pentagon correspondent, Barbara Starr is working this part of the story.

The allegations say that Gholam Shakuri was an Iran-based member of the Quds force which is, according to this document, a special operations unit of the Iranian Islamic Revolutionary Guard Corps, the Quds force. What can you tell our viewers about that?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Look, Wolf, this force is the most militant wing of Iran's Islamic Revolutionary Guard Corps. This has been front and center for the central intelligence agency, for the Pentagon for years now.

It is alleged that they have shipped weapons into Iraq that have been responsible for killing U.S. troops, that they are backing militias inside Iraq, that they have shipped weapons into Afghanistan, that they are backing Hamas and Hezbollah, that they have engaged in assassinations, in terrorist plots, in covert operations.

They are well funded. They are invested heavily across Iran's economy. Much of their money is in so-called legitimate businesses in Iran. They get their cash from those businesses. And the U.S., Wolf, has been trying to counter this by trying to shut down any international banking transactions with these kinds of companies and with these kinds of Quds operatives.

That's why today what you rapidly saw was more sanctions from the Treasury Department on the Quds force. But this is an organization that has really been in the U.S. cross hairs for some time, the dilemma, of course, is what to do about them and what to do about them now that they apparently have taken this additional step.

BLITZER: If you go to the State Department's web site and you look up Iran and the allegation of why Iran is listed by the U.S. government as a state sponsor of terrorism, the first line that jumps out at you is Iran remained the most active state sponsor of terrorism.

STARR: Well, you know, this is one of the questions that Eric Holder, the attorney general, brings up. He talks in his news conference earlier today about holding Iran responsible, about Iran directing this operation, but the question we all have remains the same. Did this go all the way to the top? Did this go to Mahmoud Ahmadinejad? Did he order this?

BLITZER: And that is something that I'm sure they have suspicions at the highest levels of the United States government, but are not ready to make that statement yet. You heard Mike Rogers, the chairman of the House Intelligence Chairman told us.

STARR: He's pretty sure.

BLITZER: He's pretty sure it went to the highest elements of the Iranian government. Barbara, stand by. We'll stay with touch with you. Much of the breaking news coverage.

We're following the reaction that's coming in now not only from the United States, from Saudi Arabia, from Iran, but from elsewhere from around the world. We're getting more details on this alleged plot as well. Much more coverage right after this.

(COMMERCIAL BREAK)

BLITZER: We just got a picture, a courtroom sketch of the suspect in this alleged terror plot, Manssor Arbabsiar. He's accused of trying to assassinate the Saudi ambassador to the United States, Adel Al Jubeir.

We're following all the breaking news, this alleged plot by the Iranian government, high elements according to the U.S. government, of the Iranian Quds force trying to kill the Saudi ambassador to the United States.

Our United Nations correspondent, Richard Roth, is watching what's going on. Richard, I take it that the United States government, the Obama administration is notifying the U.N. Security Council of this? Walk us through what's going on.

RICHARD ROTH, CNN SENIOR UNITED NATIONS CORRESPONDENT: Well, the United States is contacting its Security Council partners to notify them of the details and gravity of the plot. There's no emergency Security Council meeting at this time that's been called.

May indicate perhaps strategy or perhaps how significant this case may eventually prove to be, unclear at this time. European diplomats I spoke with we're certainly aware of the story, we're not willing to comment saying check with our embassies in Washington.

Now, as this story tends to unfold, the U.S. through Secretary of State Clinton, who I think we're still expecting to speak, may learn more regarding the timetable, but I think it's clear from what our other reporters in Washington are saying.

The U.S. at the very least is going to try to isolate Tehran and put more pressure diplomatically through sanctions and other means to remind people of the threat to the United States that Iran poses. This could always be useful information called out at another time to build a case for perhaps more additional sanctions at the U.N.

However, we've already had four rounds of sanctions, the last one in the summer last year, and that doesn't seem to have curbed Iran's nuclear program secrecy, among other issues. Included in that last round of sanctions were those targeting the revolutionary guard --

BLITZER: Hold on, Richard. Hold on, the Secretary of State Hillary Clinton is now speaking. Let's listen.

(JOINED IN PROGRESS)

HILLARY CLINTON, SECRETARY OF STATE: The FBI and others gave announcing the disruption of this plot. It was a terrific achievement by our law enforcement and intelligence communities.

And we will be consulting with our friends and partners around the world about how we can send a very strong message that this kind of action, which violates international norms must be ended.

And other areas where we can cooperate more closely in order to send a strong message to Iran and further isolate it from the international community will also be considered.

Thank you. Thank you all.

BLITZER: All right. The secretary of state, you heard her thanking the FBI and the Justice Department for this action, warning that the United States is now about to undertake additional measures. Richard Roth is still with us, our United Nations correspondent.

Richard, beyond the U.N. Security Council, this was an Arab -- this is an Arab country, Saudi Arabia. I assume the Obama administration will also seek to strengthen the sanctions against the Iranians through the Arab league, the Gulf Cooperation Council, enlist international support, if you will, to go after the Iranian government.

ROTH: Now, yes, you say that. But at the Security Council I think there are a lot of countries who are sanctioned out, despite the perhaps gravity of this alleged plot. Russia and China just vetoed a resolution last week on Syria, and that didn't even include sanctions.

And that resolution was watered down to not even include the word "sanctions" just the threat of further options. The U.S. has had stronger unilateral sanctions against Iran than European countries. I think Secretary Clinton in the State Department would like to ramp up other countries individual actions to try to take a bigger bite out of the military, economic, political wing of the Iranian regime.

Anyone that might have had anything to do with this alleged plot, The Quds component, paramilitary link as mentioned by FBI officials certainly with ties to the revolutionary guard. It was the revolutionary guard at the center of the last round of sanctions that China and Russia did go for.

But it's taken months for the U.S. to get Security Council approval every time they have done this. They trumpet the action but so far nothing seems to have visibly changed and Iran doesn't seem to change his ways.

Iranian leader Mahmoud Ahmadinejad as you've mentioned was at the U.N. general assembly just a couple of weeks ago denouncing the U.S. -- Wolf.

BLITZER: Richard, thanks very much. Let's get some perspective now on what's going on. Vali Nasr is joining us, the professor at Tufts University, a great university up in Boston.

When you heard this allegation from the United States government, the Obama administration, that high elements of the Iranian government were plotting to kill Adel Al Jubeir, the Saudi ambassador in Washington, what did you think?

PROF. VALI NASR, TUFTS UNIVERSITY: I thought it was shocking news, largely because it changes everything. It is not that Iran has not carried out attacks of this sort of assassinations in Europe, but to target any individual in the United States is a major escalation of their policies.

But also the choice of the Saudi ambassador was very interesting, largely because there's a lot of tension in the region that's caused by the Arab Spring. They have been having a cat and mouse game in Lebanon, in Syria, in Bahrain, and it shows that the Iranians are feeling the pressure of what's happening in the Arab Spring and are reacting to it. BLITZER: We heard from Mike Rogers, the chairman of the House Intelligence Committee, suggest that this could not have occurred unless the highest elements, presumably Mahmoud Ahmadinejad, maybe even the Ayatollah, were directly involved in authorizing this kind of assassination plot. Do you believe that?

NASR: Well, if indeed the Quds force was involved, then the highest leadership in Iran would have to know. But what is also interesting is timing. It is reported that President Obama was actually briefed on this in June.

That means that the planning of this goes back to February, January. We have to see what was happening then in the Middle East, in Saudi- Iranian relations and also U.S.-Iranian relations at that point in time for them to make this plot go forward. BLITZER: You've been studying Iran for many years and are one of the great authorities on the subject. What were they hoping to achieve by killing Adel Al Jubeir?

NASR: Well, the Saudi part of it, I could see why they would want to ratchet up the pressure on the Saudis. They are in a very tense rivalry with Saudi Arabia. Lebanon and Syria, in Bahrain, and they may have wanted to send Saudi Arabia a very strong signal of trying to sort of bully Saudi Arabia to back down off of its resistance to Iran.

But the choice of the location is an enigma because Iran will gain nothing by actually giving the United States ammunition to go to the U.N. Security Council to get more sanctions, to rally the international community against Iran, to turn public opinion against Iran.

We're going into an election year. This event is sure to make Iran a very important point of debate in the elections.

BLITZER: Because in the charges that were spelled out today by the U.S. government, they spoke very narrowly on the alleged assassination plot of the Saudi ambassador.

But U.S. officials are saying there was a broader plot they didn't spell out in this official document to bomb the Saudi embassy and the Israeli embassy here in Washington as well as the Saudi and Israeli embassies in Buenos Aires, Argentina, and that suggests that maybe the Iranians had a much broader initiative that they were plotting.

NASR: Indeed. I mean, again, the choice of location is very key here. Carrying out terror attacks in Buenos Aires or in the Arab world is nothing new and it would have already had made things much more difficult for Iran with the international community.

But to carry them out in the United States would have put the United States and Iran relations into a deep freeze and on a potentially very dangerous collision course. It is very difficult to see how Iran would calculate that the United States would not react very aggressively to an actual bombing in Washington, D.C.

BLITZER: Vali Nasr, thanks for coming in. NASR: Thank you.