Manssor Arbabsiar
Manssor ArbabsiarAFP/Nueces County Sheriff/File

Former car salesman Manssor Arbabsiar pleaded guilty on Wednesday to conspiring with the Iranian military to kill the Saudi ambassador to the United States, AFP reported.

Appearing at the New York federal court where he had been due to stand trial in January, the Iranian-American entered a surprise guilty plea. He faces up to 25 years in prison at his sentencing, which was set for January 23.

Judge John Keenan asked Arbabsiar, according to AFP, "Is it true that about the spring of 2011 up until the fall of 2011 that you and your co-conspirators... who were officials in the Iranian military, that you agreed to cause the assassination of the Saudi Arabian ambassador to the United States?"

"Yes," he replied, pleading guilty to three counts.

Arbabsiar was arrested in September last year at New York's John F. Kennedy International Airport, triggering a major legal and diplomatic drama between Washington and Tehran, amid already tense relations.

He was charged along with co-defendant Gholam Shakuri, a senior member of the Iranian Revolutionary Guard's elite Quds Force, who remains at large.

The two tried to hire a Mexican drug dealer for $1.5 million, first to kidnap the Saudi envoy, then, in a change of plan, to blow him up in a restaurant he frequented in Washington, Arbabsiar said.

He had arranged for $100,000 to be wired to the United States as a down payment, not realizing that the supposed assassin he recruited was in fact working for the U.S. authorities.

"In Mexico we hired a person called 'Junior' who turned out to be an FBI agent," Arbabsiar said in court, although officials say "Junior" was in fact a Drug Enforcement Administration informant, not from the FBI.

Arbabsiar was brought in and out of the courtroom in handcuffs and kept under close watch while he sat at a table with his lawyers, reported AFP.

The former Texas car salesman, who has a grey beard and wore a dark blue prison smock and orange undershirt, seemed nervous and stumbled repeatedly in his answers during the plea procedure.

Asked his age, he looked confused and said, "58, I think."

When Keenan pressured him to confirm clearly that he'd intended to murder the Saudi diplomat, Arbabsiar finally said: "No. Yes, yes."

Attorney General Eric Holder said, "The disruption of this plot should serve as a reminder of the exceptional efforts of our law enforcement and intelligence agencies in protecting America against terrorist attacks."

FBI assistant director Mary Galligan said the plot in the U.S. capital had threatened not only the ambassador but "innocent lives would have been lost and the national psyche damaged.

"Others who believe that they can carry out or even attempt to plan such brazen plots should be on notice: the FBI remains ever vigilant towards acts of terror both here and abroad," Galligan said, according to AFP.

Iran has strongly denied any involvement in what the United States says was a plot by the Quds Force, Iran's covert external action unit, to kill the ambassador.

Also on Wednesday, a Bangladeshi man with alleged links to the Al-Qaeda terror group was arrested in New York on charges of trying to use a 1,000 pound bomb to destroy the city's Federal Reserve building.

Quazi Mohammad Rezwanul Ahsan Nafis, 21, was arrested in Manhattan after he tried to detonate what he thought was a live bomb, but was actually a dummy provided in a sting operation.