U.S. Secretary of State Hillary Rodham Clinton is calling an alleged Iranian plot to kill Saudi Arabia's ambassador to the United States a "dangerous escalation" in Iran's support for terrorism that must draw an international response.

Speaking to a conference in Washington on Wednesday, Clinton urged the rest of the world to join Washington in condemning the alleged scheme, which she said violated U.S. and international law as well as Iran's treaty obligations to protect diplomats.

The U.S. has decided to penalize an Iranian commercial airline that it says is helping Iran's feared special operations forces. The government is banning Americans from doing business with Mahan Air and blocking any assets the airline might have in the U.S.

The Treasury Department says Mahan Air provides financial, material and technological support to the Quds Force and to Hezbollah. The department says Mahan's crews also shipped Iranian arms, some on behalf of Hezbollah.

Clinton said President Barack Obama 's administration wants international pressure stepped up to further isolate Iran, which it accuses of plotting to kill Saudi envoy Adel Al-Jubeir on U.S soil.

Earlier Wednesday, the State Department issued a worldwide travel alert for the next three months, warning U.S, citizens that Iran might sponsor strikes in the U.S. or abroad.

Alleged assassination plot amateurish, officials say

U.S. officials say the alleged plot against the Saudi ambassador was unusually amateurish for Iran's foreign action unit, the Quds Force.

By the U.S. account, the force's agent turned to a woman he met while working as a used car dealer to find a Mexican drug dealer-assassin, and he wound up with an informant instead.     

U.S. officials believe the sloppiness executing the plot was due to inexperience with covert operations inside the United States and Mexico.

The officials, speaking on condition of anonymity to discuss classified analysis, say they believe Iran hoped to disguise the assassination attempt as an al-Qaeda attack.

Some experts who study Iranian covert tactics say the alleged conspiracy does not bear the hallmarks of the Quds force, which favours use of established proxy factions such as Lebanon's Hezbollah and would not take the risks alleged by the U.S.

"Iran has been known to carry out pre-operational surveillance in the United States, but it has not yet used this intelligence to carry out a high-profile attack," said a report by the international intelligence think-tank Stratfor. "It seems unusual that the Iranians would approach a Mexican cartel to carry out the assassination when the Iranians probably have the capability themselves."

The alleged "Iranian-backed plan to assassinate the Saudi ambassador may indicate a more aggressive focus by the Iranian government on terrorist activity against diplomats from certain countries, to include possible attacks in the United States," the alert said.

Suspect at large

Two people, including the Quds Force member who is at large, were charged in New York Federal Court on Tuesday. The charges included conspiracy to murder a foreign official, conspiracy to use a weapon of mass destruction and conspiracy to commit an act of international terrorism transcending national boundaries.

Manssor Arbabsiar, a 56-year-old U.S. citizen who also holds an Iranian passport, was charged along with Gholam Shakuri, whom authorities said was a Quds Force member. Arbabsiar was arrested but Shakuri remains at large.

The alleged plan was to assassinate Ambassador Al-Jubeir with a bomb attack while he dined at his favourite restaurant.

U.S. Attorney General Eric Holder said the conspiracy was conceived and directed from Iran. In response, Iran accused the U.S. on Wednesday of playing a "childish game."

Britain supports new sanctions

Britain's government said Wednesday that it was consulting with the U.S. and others over new international sanctions.

"We would support any measures that help hold Iran accountable for its actions," said Steve Field, spokesman for British Prime Minister David Cameron.

Although the U.S. has accused Iran of state-sponsored terrorism in the past, this is the first time it has allegedly involved a plot to be carried out on U.S. soil, CBC News correspondent Susan Bonner reported from Washington.

"We’re talking about an act of murder, carried out by a foreign government on our soil of a foreign diplomat," Peter King, chair of the House Homeland Security committee, said after the government revealed the alleged assassination plot. "This is really an act of war."

Obama called al-Jubeir on Tuesday to declare that the foiled plot was a "flagrant" violation of U.S. and international law, the White House said. The president expressed solidarity with Saudi Arabia and said he was committed to ensuring the security of diplomats in the United States.

But Iran's parliament Speaker, Ali Larijani, called the Justice Department's allegations "cheap claims."

No reason for 'childish' plot, Iran says

"By giving it a wide media coverage, it was evident that they are trying to cover up their own problems," Larijani told an open session of the parliament Wednesday.

"They [Americans] suffered a political stroke and learned that they had begun a childish game. We have normal relations with the Saudis. There is no reason for Iran to carry out such childish acts."

In New York, Alireza Miryousefi, head of the press office of the Iranian mission to the United Nations, sent Secretary General Ban Ki-moon a letter "to express our outrage" over the allegations.

"The U.S. allegation is, obviously, a politically motivated move and a showcase of its long-standing animosity toward the Iranian nation," the letter said.

With files from The Associated Press