Iran's intelligence minister Heydar Moslehi, quoted by the state television website, pointed to the reasons he termed the alleged plot as "too mediocre to be believed."
"When you view the charges from an intelligence standpoint, there are too many contradictions to believe that a government like the United States can advance such mediocre allegations and expect them to be believable," he said.
The initial reaction of Iranian intelligence officials to the US allegation was one of surprise at the profusion of idiocies involved, said the minister.
"I ask what intelligence service or what secret agent gives order by telephone to his agent who, moreover, lives in the land of the enemy (and who then) specifies several times on the telephone the place -- the restaurant -- where the so-called assassination is to take place and says that it would be better to have more deaths (in the restaurant) and during the attack to insult the restaurant's customers." the minister said.
Moslehi questioned the FBI's charge that an American-Iranian, Manssor Arbabsiar, had admitted after his arrest that he was involved in a plot to kill ambassador Adel al-Jubeir and had been recruited by people he believed to be linked to Iran's Revolutionary Guards.
The minister added: "From a technical viewpoint, one can ask why a Mexican drug cartel had to be used for such an operation? Moreover, why would such a cartel involve itself for only 1.5 million dollars when, according to the West, it earns tens of billions of dollars each year (from drugs)" and the operation would risk attracting the anger of the US?
Pointing to what he saw as another flaw in the US charges, he asked: "Why would the accused (Arbabsiar) involve himself in such a plot just eight months after receiving American nationality of which he was dreaming" after living in America for more than 20 years?
On Thursday a grand jury in New York indicted two Iranian men in the alleged plot to get Mexican gangsters to assassinate the Saudi ambassador, court papers showed.
Iran has rejected outright all the US charges and its complaint to the UN Security Council, saying it is a US plan to divide Muslim countries and divert attention from domestic problems.
Minister Moslehi termed the US accusations "a bad quality comedy."