US sailors on three navy ships came close to opening fire on five Iranian boats at the weekend after the fleets met on major oil shipping route off Iran, according to reports.
The fleets met in international waters in the Strait of Hormuz and came within 200 yards of each other, according to US officials, who also claimed that one radio transmission from an Iranian "attack craft" threatened: "I am coming at you. You will explode in a couple of minutes."
A transmission from an Iranian craft according to claims by US officials
The Iranian boats, believed to have been operated by Iran's Revolutionary Guard, also made threatening manoeuvres, officials told CNN.
After the threatening radio communication, US sailors manned their guns and were very close to opening fire, and the captain of one US vessel was giving the order to shoot when the Iranian ships began turning away, CNN added.
Oil prices rose about 30 cents to over $98 a barrel after the CNN reported the alleged incident, with traders citing increased risk of disruptions to oil shipments along the key shipping route.
In Tehran, an Iranian foreign ministry spokesman had no comment.
The incident occurred on the eve of a visit to the Middle East by US President George W. Bush, who said last week that one of the aims of his trip was to counter Iran's ambitions in the region.
Washington has been engaged in a long stand-off with Tehran over Iran's nuclear programme.
In March, Iran seized 15 British sailors and marines in the Gulf and accused them of trespassing in Iranian territory. The sailors were held for almost two weeks before being freed.