The US has toughened its response to Iran, which it believes was behind an alleged plot to assassinate the Saudi ambassador in Washington.
The State Department said there had been direct contact with Iran.
After finalising a trade deal with South Korea, Barack Obama spoke of imposing the toughest possible sanctions on Tehran.
“This is not just a dangerous escalation. This is part of a pattern of dangerous and reckless behaviour by the Iranian government,” he told a news conference.
Obama said the US would not take any options off the table – normally diplomatic code for possible military action.
The Saudi foreign minister promised a measured response, but added that he holds Iran responsible for any action taken against the kingdom. Speaking in Vienna, Prince Saud al-Faisal said: “They consider anybody who does not follow their purposes as an enemy. That is: ‘whoever is not with us is against us.’ So they want to put pressure on everybody.”
Obama also said that even if there was not detailed operational knowledge at the highest levels in Iran, there has to be accountability.
Iran called the charges an American fabrication and expressed outrage at the accusations.