Former Defense Secretary William Perry said he had a contingency plan to attack Iran if the link had been proven, but evidence was not to either his nor President Bill Clinton's satisfaction.
The attack would have struck "at a number of their military facilities that would have weakened -- substantially weakened ... the Iranian navy and air force," he said in New York Tuesday during a speech to the Council on Foreign Relations.
The Khobar Towers bombing at a U.S. air base in Saudi Arabia is often referred to by the Bush administration as one of the first salvos in the war with terrorism. It killed 19 service members. The Sept. 11 commission suggested a connection between al-Qaida and the attack, the first time the group has been linked to the bombing.
"I believe that the Khobar Tower bombing was probably masterminded by Osama bin Laden," Perry said. "I can't be sure of that, but in retrospect, that's what I believe. At the time, he was not a suspect. At the time ... all of the evidence was pointing to Iran."
He said al-Qaida did not emerge as a major threat until Clinton's second term.
"We probably should have been more concerned about it at the time than we were but in the first term we did not see Osama bin Laden and al-Qaida as a major factor, or one that we were concerned with," he said.
In 2001, the U.S. Justice Department announced a 46-count indictment against 13 Saudis and one Lebanese man in the bombing. All were allegedly connected to Hezbollah, a terrorist group the United States believes is linked to Iran.
Perry said the FBI strongly believed at the time the bombing was ordered by Iran, but Saudi officials tried to discourage that theory.
"They feared what action we would take. They rightly feared it. In fact, I had a contingency plan for a strike on Iran, if it had been if it had been clearly established. But it was never clearly established, and so we never did that," Perry said.