Foreign Minister Prince Saud al-Faisal says Saudi Arabia will not yield to (Iran's pressure) and it will hold them accountable for each hostile action, to which the kingdom will find a suitable response.
Prince Saud, speaking in Vienna on Thursday during the inauguration of an inter-religious centre, slammed the alleged plot against Ambassador Adel al-Jubeir unveiled by the United States, calling it an "ignoble act."
"Iran's leadership is pursuing its interference in the affairs of other countries and its repeated attempts to... destabilise states," in the region, he said.
The Saudi chief diplomat accused Iran of dispatching "its agents to various Arab countries" including Kuwait, Iraq and Lebanon, the Saudi-owned Al-Hayat newspaper reported.
"This is not the first time Iran has been suspected of undertaking such actions," another Saudi-owned daily, Asharq Al-Awsat, quoted him as saying.
Tehran has strongly denied any involvement in what Washington says was a plot by the Revolutionary Guards' elite Quds force to kill Jubeir by hiring assassins from a Mexican drug cartel for $1.5 million.
Washington has named two principal suspects in the case: Manssor Arbabsiar, a used-car salesman who is a naturalised US citizen, and Gholam Shakuri, said to be an Iran-based Quds force operative.
Shakuri is believed to be in Iran, while Arbabsiar, 56, was arrested on September 29 at New York's John F. Kennedy airport.
Tehran appealed to Riyadh not to "fall into the trap," calling the US claims a plot to divide Muslim states, protect Israel and increase pressure on the Islamic republic which is already under sanctions over its controversial nuclear project.
Prince Saud pinned responsibility for the alleged plot on Tehran, saying it "planned and financed" the operation, but gave no details on how the kingdom planned to respond.
"We must wait and see," he told journalists in response to a question on whether Saudi Arabia would recall its envoy from the Iranian capital.
Riyadh "has several options available, diplomatic and otherwise, including a reduction of its diplomatic representation in Tehran," Salman al-Dussari, chief editor of the daily Al-Iqtissadiya told AFP, ruling out a military response.
"We must not mistake the calm approach of Saudi diplomacy for a sign of weakness," he said, adding that the belligerent "actions of Iran will lead it to face the International Criminal Court."
"Iranian embassies in Gulf countries are ticking time bombs, hatching plots against these countries," Dussari continued, warning of a possible "Iranian escalation in the coming days in tandem to rising international pressure."
"We can expect anything from Iran which is capable of activating its sleeper cells in the region or trying to provoke a problem in Gulf waters," he said.
University professor Abdullah Qabba said that although Riyadh cannot "accept Terhan's belligerent acts," it is likely the kingdom will take a gradual approach, perhaps starting with an "economic boycott" or a "break in diplomatic ties."
"The Saudi regime will not stop its wise and measured policy," he said.
"Saudi Arabia's only available options are political measures and putting pressure on Iran through international institutions," said Saudi analyst Abdullah Hamid Eddine, stressing that Riyadh should not act alone.