In a statement to parliament, Prime Minister Tony Blair condemned Iran’s detention of the British naval personnel as “completely unacceptable, wrong and illegal”. He warned: “It is now time to ratchet up international and diplomatic pressure in order to make sure that the Iranian government understands their total isolation on this issue.”

British Foreign Secretary Margaret Beckett announced that Britain had frozen bilateral talks with Iran on all other issues until the sailors were returned. The Foreign Office denounced footage shown on Iranian television of some of the detainees as “completely unacceptable”. During the TV segment, female sailor Faye Turney acknowledged that the British boats had “trespassed” into Iranian waters and said the detainees were being well-treated.

Vice Admiral Charles Style told a press conference that Britain “unambiguously contests” Iranian assertions that the sailors were inside Iranian waters. He produced charts, photographs and previously undisclosed navigational coordinates, purportedly showing that the sailors were about 3 kilometres inside Iraqi waters. He claimed that Iran had produced two conflicting sets of coordinates during secret diplomatic discussions.

British “proof” that its sailors were “ambushed” inside Iraqi territorial waters cannot be taken at face value any more than Iran’s “substantial evidence” to the contrary. The area of the Persian Gulf near the Shatt al-Arab waterway—the confluence of the Tigris and Euphrates rivers—has long been the subject of dispute between Iraq and Iran. “If this happened south of where the river boundary ends, knowing the coordinates wouldn’t necessarily help us,” Robert Schofield of King’s College, an expert on the waterway, explained to Associated Press.

More significant than the dispute over naval co-ordinates is the political context. The incident took place as the US, with British backing, intensified the pressure on Iran over its nuclear programs, its alleged supply of weapons to anti-occupation insurgents in Iraq and claims that Tehran is supporting “terrorism” throughout the Middle East. The US navy has doubled the size of its fleet, stationing two aircraft carrier groups in the area for the first time since the 2003 invasion of Iraq. The Pentagon has also sent Patriot anti-missile batteries to the Gulf States and mine-sweepers to the Persian Gulf.

The British navy too has doubled its presence in the Gulf since last October. The extra warships included the HMS Cornwall, which dispatched the two light craft seized last Friday by Iranian forces.

The military build up is clearly aimed against Iran. Captain Bradley Johanson, commander of the USS John C. Stennis, told the press: “If there is a strong [American] presence, then it sends a clear message that you better be careful about trying to intimidate others. Iran has adopted a very escalatory posture with the things that they have done.” The Bush administration’s own “escalatory posture” was evident during the past two days of war games, as 15 warships and more than 100 warplanes practiced manoeuvres and attacks not far from the Iranian coastline.

According to several press reports, the Pentagon may well have accelerated the planned exercise in response to the detention of the British sailors. A senior US military official in Bahrain told ABC News that the huge show of force was “a clear effort” to send a message to Iran. US naval officials said the operation was “hastily planned” after the 15 Britons were seized Friday. White House spokeswoman Dana Perino yesterday denied any connection, saying: “There is no escalation of tensions on our part.”

International investors are certainly concerned about the sharpening tensions. As Reuters noted: “US naval exercises in the Gulf have rattled global financial markets, sending oil prices higher and contributing to declines in stock prices. Markets got a jolt late on Tuesday by a rumour—which proved unfounded—of a clash between Iran and the US navy.”

The US and British naval build up in the Gulf is just one element of the US administration’s provocative stance against Iran, which included the imposition of tougher UN sanctions last Saturday. In January, President Bush declared that US forces in Iraq would “seek out and destroy” Iranian networks providing arms and other support to Shiite militias inside Iraq. On the same day, US special forces conducted an early morning raid on an Iranian diplomatic office in the northern Iraqi city of Irbil. The US military has detained five Iranian officials without charge for more than two months despite calls by the Iraqi government for their release.

The Irbil raid was a calculated US provocation which, as Washington was well aware, could produce a reaction. The British-based Telegraph confirmed this week that the CIA warned British intelligence chiefs that the arrests could result in reprisals, possibly against British troops in southern Iraq. “Although the CIA alert led to the United States raising its official security threat throughout the Middle East and elsewhere, Britain did not follow suit,” the article explained.

Several commentators have speculated that Iran may link the fate of the British sailors to the release of its officials held in Iraq—a claim that Iranian officials have denied. While the British and international media generally assume that the detention of the sailors is a calculated plot by Tehran, it cannot be ruled out that the incident was engineered in London or Washington. Veteran American journalist Seymour Hersh, among others, has alleged that US and Israeli intelligence agents are actively operating inside Iran.

The US-based Stratfor think tank, which has close links to the American intelligence and military establishment, headlined its article on the incident “Another step in the US-Iranian Covert War”. While uncertain about the motive for detaining the British sailors, the article indicated that it may be linked to Western intelligence operations inside Iran. It pointed to the alleged defection of a senior Iranian Revolutionary Guard general Ali Reza Asghari earlier this year. He is reportedly being interrogated by US intelligence, including over Tehran’s knowledge of Western agents operating inside Iran.

According to Stratfor, “With this in mind, there have been recent indications from US and Israeli intelligence sources that the British MI6 was engaged in an operation to extract one of its agents from Iran, but a leak tipped MOIS [Iranian intelligence] off to the plan. According to an unconfirmed source, the IRGC [Iranian Revolutionary Guard Corps] nabbed the British [MI6] personnel, as well as the agent, to use as a bargaining chip to secure the release of the five detained Iranians. If these negotiations go poorly for Iran, the Britons could very well be tried for espionage.”

Whatever the exact reasons for the seizure of the British sailors, the chief responsibility for their predicament rests with the Blair government and the Bush administration. The only reason for the presence of the British warships in waters disputed by Iraq and Iran is the illegal US-led invasion and occupation of Iraq in 2003. Far from pulling out of Iraq, the White House is now menacing neighbouring Iran as part of broader US ambitions to dominate the oil-rich region.

It is in this dangerous political hothouse that a small incident involving the detention of British sailors can spiral out of control. Several right-wing British newspapers have already denounced the Blair government for failing to take tougher action against Iran. An editorial in the Times on Tuesday condemned “the pusillanimous timidity of British officials and politicians, who have failed disgracefully to confront Iran with the ultimatum this flagrant aggression demands”.

The Telegraph argued for intensified sanctions against Iran unless “it stops lying to us about the details of its nuclear program, to stop arming and directing insurgents in southern Iraq, and to stop violating Iraqi territorial waters.... We wait anxiously to see whether this weakened and discredited Prime Minister has the necessary spine to do what is required, or whether Britain will persist in presenting its weakest aspect to a potential enemy.”

To date, the Bush administration has kept a relatively low profile over the incident. However, Lieutenant Commander Erik Horner, second-in command of the USS Underwood in the Gulf, left no doubt about US reaction to a similar situation involving American sailors. “The unique US navy rules of engagement say we not only have the right to self-defence, but also an obligation to self-defence,” he said. Asked if his men would have fired on Iranian forces, he bluntly declared: “Agreed. Yes”.

In other words, the Bush administration has stationed a huge US naval presence in the Persian Gulf with rules of engagement that oblige US forces to respond to any incident—actual or imagined. Any clash could of course become the pretext for unleashing a devastating assault on Iran using the overwhelming US firepower now in place.