Iran warning to US warship sends tensions soaring

Iran's military on Tuesday warned one of the US navy's biggest aircraft carriers to keep away from the Gulf, in an escalating showdown over Tehran's nuclear drive that could pitch into armed confrontation.

"We advise and insist that this warship not return to its former base in the Persian Gulf," said Brigadier General Ataollah Salehi, Iran's armed forces chief.

"We don't have the intention of repeating our warning, and we warn only once," he was quoted as saying by the armed forces' official website.

The defiant message came just after Iran completed 10 days of naval manoeuvres at the entrance to the Gulf to show it could close the strategic oil shipping channel in the Strait of Hormuz if it felt threatened.

In the climax of the war games on Monday, Iran test-fired three missiles -- including a new cruise missile -- designed to sink warships.

The aircraft carrier Salehi was referring to was the USS John C. Stennis, one of the US navy's biggest warships. The massive, nuclear-powered vessel transports 90 fighter jets and helicopters and is usually escorted by around five destroyers. It is close to finishing its seven-month deployment at sea.

The carrier last week passed through the Strait of Hormuz heading east across the Gulf of Oman and through the zone where the Iranian navy was holding its manoeuvres. The US Defence Department called its passage "routine".

The potential for Iran-US conflict sent a shiver through oil markets Tuesday, helping oil prices jump more than a dollar a barrel.

There was no sign of a let-up in the tensions.

US President Barack Obama at the weekend signed into law new sanctions targeting Iran's central bank, which processes most of the Islamic republic's oil export sales.

The European Union, which is mulling an embargo on Iranian oil, is expected to announce further sanctions of its own at the end of January.

The Western sanctions add to four sets of UN sanctions imposed over Iran's nuclear activities.

The United States and many Western nations believe Iran is developing an atomic arsenal. Tehran denies that, saying its nuclear programme is exclusively for energy production and medical isotopes.

In a gesture calculated to underline progress it has made, Iran's atomic energy organisation last Sunday said its scientists had made the country's first nuclear fuel rod from indigenous uranium.

Iran's armed forces chief-of-staff, General Hassan Firouzabadi, added to the defiance by saying Tuesday that the Revolutionary Guards, an elite military force apart from the regular defence services, would soon hold its own navy manoeuvres in the Gulf.

"Manoeuvres are part of the programme Iran's navy and Revolutionary Guards hold each year to increase their preparation. We will soon show the massive might of the Guards' naval forces," Firouzabadi was quoted as saying by the news agencies Fars and ISNA.

Foreign ministry spokesman Ramin Mehmanparast told reporters that "the foreign forces" present in the Gulf -- meaning the US navy -- "are against the security of the region."

He said Iran's navy war games underlined his country's commitment to ensuring "stability and security in the region."

Despite the increasingly bellicose stand Iran's military was taking, Tehran was keeping the door open to negotiating with world powers over its nuclear programme.

Mehmanparast said Iran was "waiting" for EU foreign policy chief Catherine Ashton to set a date and venue for a meeting to discuss the resumption of talks that have been stalled for nearly a year.

The negotiations were being held with the five permanent members of the UN Security Council -- Britain, China, France, Russia and the United States, plus non-permanent member Germany.

Although international pressure has already hit Iran's economy by scaring off foreign investors, Mehmanparast said a sudden dive in the Iranian currency at the weekend, after Obama put the new US measures into effect, had nothing to do with sanctions.

"What's happening with the exchange market has its roots elsewhere," he said. "It has no connection whatsoever with foreign policy."

The currency, the rial, appeared to stabilise on Tuesday, after losing 12 percent on Monday. Economic and financial experts were to hold a meeting at the central bank on Wednesday to discuss the slide, officials said.