Barack Obama, the US president, has demanded answers from the Iranian government over an alleged plot to kill the Saudi amabssador in Washington.

Tehran rejects the accusations, which involve a used car salesmen and a Mexican drug cartel, as cartoonish.

It says the allegations threaten stability in the Gulf, where Saudi Arabia and Iran, the biggest regional powers, are fierce rivals and Washington has a huge military presence.

But voices in the US Congress are already pushing for harsh action.

And Obama said Washington would not take any options off the table in dealing with Iran, a phrase US officials regularly use towards Tehran that is diplomatic code for the possibility of military action.

So as Washington rallies its allies against Tehran, what are its options ? And how credible are these accusations in an already tense and volatile Middle East ?

Inside Story, with presenter Hazem Sika, discusses with Raymond Tanter, a former senior staffer at the US national security council and author of Terror Tagging: Of an Iranian Dissident Organization; Mohammad Marandi, professor of political science at the University of Tehran; and Theodore Karasik, security analyst, and director of research at the Institute for Near East and Gulf Military analysis.