Britain said today it was concerned at Iranian "sabre-rattling" about possibly putting captured British naval personnel on trial and for the first time voiced regret the incident had occurred.
Iran's ambassador to Moscow said the 15 Britons captured eight days ago could face punishment if found guilty of illegally entering the Islamic Republic's territorial waters.
Britain insists the sailors were seized in Iraqi waters and Foreign Secretary Margaret Beckett said she was worried by such talk.
"Obviously, I am concerned. It is not the first person to have made sabre-rattling noises," she told reporters after a European Union foreign ministers' meeting in Germany.
"The message I want to send is I think everyone regrets that this position has arisen. What we want is a way out of it."
Beckett said Britain had sent Iran a written reply to its diplomatic note on the detention of the sailors and had so far received no response.
Iran seized the sailors and marines in the northern Gulf on March 23 when they were on a U.N.-backed mission searching for smugglers. Tehran says they strayed into Iranian waters but Britain insists they were well in Iraqi territory.
The crisis, at a time of heightened Middle East tensions over Iran's nuclear ambitions, has helped push oil prices to six-month highs over concerns an escalation might cut oil exports from the region.
There were more confusing signals about Iran's intentions.
Iran's Moscow ambassador, Gholamreza Ansari, said in an interview broadcast by Vesti-24 television on Friday, according to a Reuters translation from the original Farsi: "If there is no guilt they will be freed but the legal process is going on and has to be completed and if they are found guilty they will face the punishment."
It was not clear on what authority he was speaking and IRNA said on Saturday Ansari had denied making the comments.
Foreign Minister Manouchehr Mottaki said on March 25 Iran was considering charging the sailors with illegally entering its waters.
Iran's Foreign Ministry delivered a letter to Britain's embassy in Tehran on Thursday, the first written communication between the two capitals since the crisis began.
The IRNA news agency said the Iranian message asked for "necessary guarantees that violations against Iranian waters would not be repeated".
Beckett said: "We have made our response and we are now beginning to discuss. As you may know it's a holiday period in Iran and it's perhaps not too helpful."
The Iranian government is largely shut down for the two-week Nowruz holiday, a pre-Islamic Persian new year, which began on March 21 and ends next Tuesday.
Iran displayed three of the detained Britons on television on Friday and released a letter from one saying she was being held because of "oppressive" British and U.S. behaviour in Iraq.
British forces have been deployed in southern Iraq since joining the U.S.-led invasion of the country in 2003. Britain and the United States accuse Iran of allowing sophisticated weapons used to target their forces to be brought into Iraq.