1. ESCALATION

    Iran Denies Link to Terror Plot

    Iranian President Mahmoud Ahmadinejad flashes the V for "victory" sign as he waits to welcome China's Politburo Standing Committee Member He Guoqiang in Tehran on July 16, 2011. AFP PHOTO/ATTA KENARE (Photo credit should read ATTA KENARE/AFP/Getty Images)

    Atta Kenare / Getty Images

    Iran denied any involvement in the terror plot, calling the accusation an attempt by the U.S. to divert attention from its own financial problems and the Occupy Wall Street demonstrations. Some foreign-policy experts questioned if the alleged assassination attempt really was tied to Iran’s government, with Alireza Nader of the Rand Corporation saying the alleged plot “doesn’t really fit Iran’s mode of operations.” Meanwhile, the U.S. Treasury Department imposed sanctions Wednesday on Iran’s Mahan Air, the airline reported to have flown members of an elite force linked to an alleged plot to kill the Saudi ambassador to the U.S. Under the sanctions, the airline’s U.S. assets will be frozen and U.S. firms will be barred from any business with the airline.Secretary of State Hillary Clinton called the plot—allegedly backed by the Iranian government—a “reckless act” that “undermines international norms.”

    Read it at New York Times