Nueces County Sheriff

Mansour Arbabsiar is seen in a 2001 booking photo after he was charged for check fraud.

Updated at 2:30 p.m. ET: A Texas man pleaded guilty Wednesday to plotting to assassinate Saudi Arabia's ambassador to the United States, acknowledging he agreed to hire what he thought was a drug dealer in Mexico last year for $1.5 million to carry out the attack with explosives at a Washington, D.C., restaurant.

Manssor Arbabsiar, 58, entered the plea to two conspiracy charges and a murder-for-hire count in U.S. District Court in Manhattan. Judge John F. Keenan repeatedly asked Arbabsiar whether he intended to kill the ambassador. Arbabsiar, a U.S. citizen who holds an Iranian passport, said he did.

"I take responsibility for my actions," Arbabsiar said.

Arbabsiar also admitted he agreed to help transfer more than $100,000 through a New York bank to help further the plot. 

When Arbabsiar's arrest was announced last year, President Barack Obama's administration accused the Iranian government of being behind the planned assassination of Ambassador Adel al Jubeir in Washington.

The press attache at Iran's mission to the United Nations then called the accusation "baseless."

"Mr. Arbabsiar’s plea today confirms what our investigation had already uncovered: that he plotted to murder the Saudi Ambassador with members of Iran’s elite Qods Force," said FBI Acting Assistant Director Mary Galligan. "The FBI remains ever vigilant toward acts of terror both here and abroad."

Authorities say Arbabsiar earlier admitted his role in a $1.5 million plot to kill the ambassador at a restaurant by setting off explosives. 

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Sentencing is scheduled Jan. 23. Arbabsiar faces up to 25 years in prison. A trial had been scheduled for January.

Arbabsiar, who lived in Corpus Christi, Texas, for more than a decade, said he went to Mexico last year to meet a man named Junior, "who turned out to be an FBI agent." He said that he and others had agreed to arrange the kidnapping of ambassador Al-Jubeir, but Junior said it would be easier to kill the ambassador.

Arbabsiar has been held without bail since he was arrested Sept. 29, 2011 at John F. Kennedy International Airport. He was brought into court Wednesday in handcuffs. He spoke English and did not use a translator, despite saying he understood only about half of what he read in English. Bearded and bespectacled, he smiled several times during the proceeding, including in the direction of courtroom artists who were seated in the jury box when he entered court.

Defense lawyers say Arbabsiar suffers from bipolar disorder.

Assistant U.S. Attorney Edward Kim said that if the government had proceeded to trial, it would have presented a jury with secretly recorded conversations between Arbabsiar and a confidential source, along with Arbabsiar's extensive post-arrest statement to authorities and emails and financial records.

Authorities have said they secretly recorded conversations between Arbabsiar and an informant with the Drug Enforcement Administration after Arbabsiar approached the informant in Mexico and asked his knowledge of explosives for a plot to blow up the Saudi embassy in Washington. They said Arbabsiar later offered $1.5 million for the death of the ambassador.

A second person, Gholam Shakuri, was charged in the plot but remains at large in Iran.

The Justice Department said Shakuri is an Iran-based member of Iran’s Qods Force, which is a special operations unit of the Iranian Islamic Revolutionary Guard Corps that is said to sponsor and promote terrorist activities abroad.

Manhattan U.S. Attorney Preet Bharara stated: “As was originally charged, and as Arbabsiar has now admitted, he was the extended murderous hand of his co-conspirators, officials of the Iranian military based in Iran, who plotted to kill the Saudi Ambassador in the United States and were willing to kill as many bystanders as necessary to do so. Arbabsiar traveled to and from the United States, Mexico and Iran and was in telephone contact with his Iranian confederates while he brokered an audacious plot. The audacity of the plot should not cause doubt, but rather vigilance regarding others like Arbabsiar, who are enlisted as the violent emissaries of plotting foreign officials. This office will continue to pursue the co-conspirators in this plot and others in Iran or elsewhere who try to export murder. Thanks to the great work of the FBI, DEA and the prosecutors in this office, Mr. Arbabsiar must now answer for his conduct.”

Pete Williams is NBC News' justice correspondent. Jonathan Dienst is WNBC's chief investigative correspondent. Shimon Prokupecz is a WNBC investigative producer.    

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Iran is pushing back against U.S. efforts to strengthen sanctions against Tehran in response to an alleged plot to assassinate the Saudi ambassador to Washington, demanding a public apology and unspecified monetary damages, an Iranian diplomat tells NBC News.

The Iranian demands were contained in a recent letter to the U.S., according to the diplomat, who spoke on condition of anonymity. It calls on the U.S. to apologize publicly to both the Islamic republic and officials of the Al Quds Force for “material and moral damages” caused by “this baseless accusation,” which it argues violated "international rules and regulations."

The letter states that such deception has become "a permanent part of statecraft in the U.S.," according to the source, citing as an example the U.S. invasion of Iraq, which it says was “based on such false information.”

"After killing hundreds of thousands of innocent Iraqis and U.S. soldiers and wasting billions of dollars from the U.S. citizens' pocket, the U.S. has no other way out except leaving Iraq," the diplomatic source said, recounting the argument made in the letter.

The diplomatic source would not provide details on when the letter was sent out, to whom it was addressed or who in the Iranian government wrote it. .

A State Department representative acknowledged Sunday that a letter had been received, but declined to discuss its contents.

The spokesperson added that the two sides are talking about the alleged plot, saying the U.S. "is still in contact with Iran regarding this case and continue to receive non-constructive responses."

The letter raises the stakes in a diplomatic standoff arising from the indictment last month of an Iranian American and an Iranian on terrorism and other charges related to the alleged plot.  

U.S. officials have cited the plot as the latest example of Iranian terrorism and evidence of its increasing extremism. At the same time, Iranian officials at all levels of the government, including Supreme Leader Ali Khamenei, have excoriated the U.S.

"If U.S. officials have some delusions, (they must) know that any unsuitable act, whether political or security, will meet a resolute response from the Iranian nation," Khamenei warned two weeks ago on Iranian television, suggesting the allegations may be used by the Obama administration to justify war.

President Mahmud Ahmadinejad said similarly that "Iran is a civilized nation and doesn't need to resort to assassination."

 "The culture of terror belongs to you," he said, referring to the United States.

Iran also has demanded that a diplomat be allowed to visit the Iranian American suspect, Manssor Arbabsiar, in prison, a request that has yet to be honored.

Nueces County Sheriff's Office / AP file

Manssor Arbabsiar, 56, has pleaded not guilty to a five-count indictment alleging he plotted to assassinate the Saudi ambassador to the United States.

On the U.S. side, President Barack Obama, Secretary of State Hillary Clinton and Attorney General Eric Holder have all publicly discussed the significance of the alleged plot, with Clinton stating unequivocally that the U.S. is using the allegations as leverage to secure tougher sanctions, including new measures in the United Nations. In the past, Russia and China have resisted such sanctions.

Just last week, Treasury dispatched its undersecretary for terrorism finance to Europe, where he held meetings with senior government officials in London, Paris, Berlin, and Rome and shared details of the alleged plot.

Arbabsiar, a former used car salesman, was arrested on Sept. 29 in New York. He faces several charges including conspiracy to murder a foreign official, specifically Saudi ambassador Adel al-Jubeir; conspiracy to use a weapon of mass destruction; and conspiracy to commit an act of terrorism.

U.S. prosecutors alleged that Arbabsiar and the other suspect, Iranian Gholam Shakuri, planned to assassinate the Saudi ambassador by planting a bomb in a Washington restaurant. The plot reportedly was uncovered when a Drug Enforcement Administration informant told agency officials that Arbabsiar had attempted to contacted members of the Los Zetas Mexican drug cartel to try and obtain the explosives.

Shakuri is believed to still be in Iran. U.S. officials said he is a member of Iran's Quds Force, the covert operations arm of the country’s powerful Islamic Revolutionary Guard Corps.

Arbabsiar will be back in Manhattan federal court on Dec. 21 for a status update hearing.

NBC News producer Catherine Chomiak contributed to this report.

Related coverage in Open Channel:

Sources: Would-be assassin linked elite Iran military unit to drug trade 

Last alleged Iran assassination plot on U.S. soil was a success 

Iranian military official implicated in plot and deadly Iraq attack