Iran said it had delayed promised long-range missile tests in the Gulf on Saturday and signalled it was ready for fresh talks with the West on its disputed nuclear programme. Iran's state media initially reported early on Saturday that long-range missiles had been launched during naval exercises, a move likely to irk the West, which is concerned over threats by Tehran to close off a vital oil shipping route in the Gulf.
But Deputy Navy Commander Mahmoud Mousavi later went on the English language Press TV channel to deny the missiles had in fact been fired: "The exercise of launching missiles will be carried out in the coming days." Ten days of Iranian naval drills have coincided with increased tension over Tehran's nuclear programme with Washington and its allies. The European Union said it was considering a ban - already in place in the United States - on imports from the major oil producer.
A spokeswoman for Germany's Foreign Ministry said Berlin was following events carefully, adding: "Foreign Minister (Guido) Westerwelle is concerned that the verbal escalation of the last few days does not lead to a logic of actual escalation." Analysts say the conflicting reports on the missile test were intended to make the West think twice about ratcheting up pressure on Iran over its nuclear work - which the West says, and Tehran denies, is aimed at building nuclear bombs.
"The location and the timing of the drill were very shrewd ... then came reports on launching missiles that can target America's bases in the region and Israel," said analyst Hamid Farahvashian.
"One of the messages was that you mess with Iran, then you stand to suffer from economic havoc," he said. "Iranians have always used this method of carrot and stick ... first they used the stick of closing Hormuz and now the carrot is its willingness for talks." Iran has fired missiles in past exercises, as in 2009, when it fired the surface-to-surface Shahab-3 strategic ballistic missile, whose range of up to 1,000 km (625 miles) could enable it to strike Israel and US bases in the Middle East. Washington has expressed concern about Tehran's missiles, which include the Shahab-3, the Ghadr-1 with an estimated 1,600 km range and a Shahab-3 variant known as Sajjil-2 with a range of up to 2,400 km.
Iranian media have given massive coverage to the drill, state television broadcasting live in an apparent attempt to strike a patriotic chord among ordinary Iranians concerned about a foreign military strike. The United States and Israel have not ruled out a military option if diplomacy fails to resolve the nuclear dispute. "I have already witnessed a war with Iraq in the 1980s ... I can hear the drum beating of the war. A misfired bullet can spark a serious war," said merchant Mohsen Sanaie, 62, glancing over newspaper headlines at a central Tehran news-stand.
He warily pointed at the headline of the Sharq newspaper "Power rally in the Strait of Hormuz". The strait, through which passes 40 percent of the world's oil, is in the territorial waters of Iran and Oman, but under international maritime law it is considered open to international navigation and shutting it down would be seen as an act of war.
The US Fifth Fleet said it would not allow any disruption of traffic along the world's most important oil route, which connects the biggest Gulf oil producers, including Saudi Arabia, with the Gulf of Oman and the Arabian Sea. At its narrowest point, it is 21 miles (34 km) across. Analysts say choking off the strait would hurt Iran's oil-dependent economy, particularly when Opec member Saudi Arabia has pledged to compensate for any shortages in Iran's crude exports to Europe.