The Buenos Aires bombings were a particularly bloody and long-range operation but it was not, an isolated instance of Iran combining diplomacy and terror. Hezbollah was founded by the Iranian Ambassador to Damascus, Ali Akbar Mohtashemi (google “Father of Hezbollah” and his name is the most frequent.) In 1985-6 a series of bombs in Paris were linked to the Iranian Embassy. When French authorities tried to question Wahid Gordji, a translator at the Iranian Embassy in Paris an armed standoff ensued (ultimately Gordji was questioned briefly and then permitted to flee to Iran.)
In 1992 four Iranian Kurdish leaders were assassinated at a Berlin restaurant called Mykonos. Ultimately the trial implicated Rafsanjani, Khamenei, foreign minister Velayati, and intelligence chief Ali Fallahian. The gunmen, again, were Hezbollah members. The coordinator for this attack, Kazem Darabi, was performing the cultural attaché function in Germany but did not have diplomatic immunity. He was tried and sentenced for his crime. Iran learned its lesson, Rabbani (coordinator of the AMIA attack) was granted diplomatic immunity in March 1994 (only four months before the attack) even though he had been in Argentina for 11 years. It is difficult to believe these operations were carried out without official approval from the top.
All of these attacks (and there were others) furthered Iranian international objectives. After the Paris bombings the French released frozen Iranian funds, previously the French had strongly backed the Iraqis in the Iran-Iraq war. The Iranian Kurdish leaders murdered in the Mykonos affair were key opposition leaders. The 1992 Embassy bombing in Buenos Aires was to avenge Israel’s assassination of Hezbollah chief Abbas Musawi.
This period of high profile Iranian terrorism ended in 1996 after the Khobar bombing. Richard Clarke, who was counter-terror chief at the NSC at the time, stated that the United States responded to Iran through covert action. This may have been outing Iranian agents around the world, which would have hurt their international terror infrastructure.
The shift was tactical (perhaps like the change in the nuclear weaponization program). The regime remained involved in terrorism, just in different arenas and more often through proxies. Tehran is still Hezbollah’s lead sponsor, has provided training and logistical support to al-Qaeda (and a range of Sunni Islamists), and become the leading sponsor of Palestinian terror.