Bush warns Iran of consequences of any new naval crisis

By Tabassum Zakaria

JERUSALEM (Reuters) - President George W. Bush warned Iran on Wednesday of "serious consequences" if it attacked U.S. ships in the Gulf and said all options were on the table.

Washington says Iranian boats at the weekend aggressively approached three U.S. Naval ships in the Strait of Hormuz, a major oil shipping route off Iran's coast, and threatened the ships would explode.

"We have made it clear publicly and they know our position, and that is there will be serious consequences if they attack our ships, pure and simple," Bush told a news conference in Jerusalem. "My advice to them is don't do it."

Bush's National Security Adviser Stephen Hadley told reporters aboard the president's plane the incident was a "very provocative act" that came close to causing an altercation.

"The national security adviser was making it abundantly clear that all options are on the table to protect our assets," Bush said, with Israeli Prime Minister Ehud Olmert at his side.

Bush's warning came at the start of a Middle East visit aimed at bolstering Israeli-Palestinian peace efforts and rallying Arab opposition to Iran, which is already at odds with Washington over its nuclear program.

The United States released a video of the weekend encounter, including a recording of what it said was the exchange between the two sides.

Iran rejected the footage as fake and accused Washington of trying to stir up tension in the region. Iran's Revolutionary Guards said the images were archive pictures.

"America aims to implement this plan saying Iran has been and is the source of fear in the Middle East," Defense Minister Mostafa Mohammad Najjar was quoted by state television as saying.

"THAT WAS IT"

"Iranian craft always ask other ships to identify themselves and this is what they did to the American ships. American ships answered and that was it."

Responding to Iran's accusation that the footage was faked, U.S. State Department spokesman Sean McCormack told reporters: "Maybe they are confusing what they might have done given the circumstances."

The spokesman said the United States was considering making a formal complaint to Iran over the incident via the Swiss government, which protects U.S. interests in Tehran.

The United States broke diplomatic relations with Iran after the 1979 Islamic revolution.

Bush reiterated in Jerusalem that Iran was a "threat to world peace" and called on the international community to prevent Tehran from developing a nuclear weapon.