On a sunny day in late June, an Iranian émigré named Amir Saadouni met on the terrace of a Luxembourg cafe with an Iranian intelligence agent known to him only as Daniel, who for years had paid him to spy on a France-based group that opposes the regime in Tehran.
Gathering information “isn’t enough for us,” Daniel said, according to people familiar with the matter. They said the agent gave Mr. Saadouni and his wife an explosive device to set off at an annual conference organized by the group, where Rudy Giuliani, President Trump’s lawyer, was due to speak on June 30.
European security services, acting in part on a tip provided by Israeli intelligence, were watching, officials said. Belgian authorities said they stopped Mr. Saadouni and his wife on their way to the conference outside Paris, and found a device that contained half a kilogram of TATP, a powerful explosive. German police arrested the intelligence agent a few miles from the border with Austria, where he was stationed as a diplomat at the Iranian embassy and would have enjoyed immunity from prosecution, officials said.
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The alleged plot was thwarted at a crucial diplomatic moment, a month after Washington withdrew from the Iran nuclear accord. French President Emmanuel Macron and other European leaders are trying to salvage the deal. On Nov. 5, the Trump administration is set to impose a new round of sanctions—its toughest yet targeting Iran’s oil sector.
The allegation that an Iranian operative plotted an attack on French soil is jeopardizing Europe’s support for the accord. As U.S. and Israeli officials ramp up pressure on Europe to sever ties with Tehran, they have cited it as a reason why Mr. Macron and other leaders should end their support for the deal.
On Tuesday, Denmark announced it had foiled an Iranian operation to kill a dissident, turning up the pressure on Europe to harden its posture toward Tehran. A spokesman for Iran’s foreign ministry said Iran had no involvement in the case.
This account of the alleged June plot is based on interviews with European officials as well as people close to Mr. Saadouni and his wife, Nasimeh Naami. An attorney for the agent, identified as Assadollah Assadi, declined to comment. The Iranian government didn’t respond to a request for comment. Iranian Foreign Minister Javad Zarif has claimed the plot was mounted by Iran’s international opponents to drive a wedge between Tehran and the West.
Given France’s role in trying to salvage the deal, some European authorities thought the alleged plot might be a rogue operation. But French authorities said they traced responsibility for it to a senior official in the Iranian intelligence ministry, Saeid Hashemi Moghadam.
Now, officials and analysts express concern the incident marks an escalation in Iran’s willingness to undertake violent covert operations in the West—after years of relative restraint—as diplomacy with the U.S. falters.
“They feel the constraints on them have been removed,” said Bruce Riedel, a senior fellow at the Brookings Institution, a Washington-based think tank, and former official at the Central Intelligence Agency, the White House and the Pentagon.
The Iranian government and the group targeted in the alleged plot, known as Mujahedin-e Khalq, or MEK, have been foes since the country’s Islamic revolution in 1979. MEK was one of several factions vying for power and, after losing a bloody struggle with forces loyal to Ayatollah Ruhollah Khomeini, it was largely forced into exile, though it maintained a clandestine membership inside Iran. The U.S. government considered MEK a terrorist organization from 1997 to 2012, when the Obama administration lifted that designation.
Mr. Saadouni, who is 38 years old, was granted political asylum in Belgium as a member of MEK after leaving Iran roughly a decade ago. He quickly settled into life in the West, cultivating an interest in rock music and dressing in black, people who know him say. His favorite bands included Rammstein and Pink Floyd.
He also struck up an online relationship with Ms. Naami, who worked at a swimming pool in Iran. Ms. Naami came to Belgium and married Mr. Saadouni.
Several years ago, Mr. Assadi, under the alias Daniel, approached Mr. Saadouni saying he was an Iranian intelligence agent seeking information about MEK, according to people close to the couple.
Though he bore the nondescript title of “Third Counselor at the Iranian embassy in Vienna,” French officials say Mr. Assadi was working for Iran’s intelligence ministry, which is controlled by hard-liners and often takes orders directly from Iran’s Supreme Leader Ayatollah Ali Khamenei. Mr. Assadi was prepared to pay thousands of euros for the intelligence, a person close to Mr. Saadouni said, and threatened to make life difficult for Mr. Saadouni’s family in Iran if he refused.
Starting around 2014, Mr. Saadouni and Ms. Naami regularly went to MEK meetings and reported back to Mr. Assadi in cities across Europe, that person said. Though Mr. Saadouni remained his point of contact, Mr. Assadi insisted Ms. Naami accompany him on missions.
Sometimes they would travel to Vienna, meeting Mr. Assadi on a train after multiple transfers to ensure they weren’t being followed, people close to the couple said. Mr. Saadouni would debrief Mr. Assadi, receive new orders and leave with bags of cash.
The money allowed the couple to live comfortably. Mr. Saadouni performed odd jobs, and Ms. Naami worked at a clothes ironing service. When the couple became estranged in recent years, they could afford to live separately, with their own apartments and cars. Earlier this year, Mr. Saadouni paid more than four hundred euros for a ticket to see Roger Waters of Pink Floyd in Antwerp.
Mr. Saadouni believed Mr. Assadi had multiple moles inside MEK, according to a person close to Mr. Saadouni. When grilling him about MEK meetings, Mr. Assadi would show him photos of people he said were there even though Mr. Saadouni hadn’t mentioned them, the person said.
Shahin Gobadi, an MEK spokesman, said Mr. Saadouni and Ms. Naami were supporters of the group, though not in its inner circle.
Under orders from Mr. Assadi, the couple became regulars at an annual gathering of Iranian opposition groups organized by MEK outside Paris. Retired U.S. and European officials and ex-politicians with hawkish views on Iran were often invited to speak, including Mr. Giuliani and John Bolton. Now both men are close to Mr. Trump, with Mr. Bolton serving as the national security adviser.
“I’m sure that the Iranians are very alarmed when they see Giuliani and Bolton and others openly embracing MEK,” Mr. Riedel said.
The Iranian regime has also faced widespread protests this year, and blames MEK for helping to stoke them, according to MEK officials.
Days before the June 30 conference, Mr. Assadi summoned Mr. Saadouni and Ms. Naami to Luxembourg.
Mr. Assadi placed a makeup pouch into Ms. Naami’s handbag, according to people close to the couple. They said the couple later told investigators Mr. Assadi said the pouch contained a device that was effectively a firecracker, which would make a loud noise but wouldn’t hurt anyone.
—Laurence Norman contributed to this article.
Write to Matthew Dalton at Matthew.Dalton@wsj.com