Blair warns Iran of "different phase"

By Paul Hughes

LONDON (Reuters) - British Prime Minister Tony Blair warned Iran on Tuesday of a "different phase" if it does not free 15 British military personnel captured in the Gulf four days ago.

The sailors' capture and new U.N. sanctions imposed on Tehran on Saturday over its disputed nuclear program have stoked tensions between the West and Iran and pushed oil prices to a 2007 high.

Russia and the United Arab Emirates on Tuesday urged Iran to comply with U.N. demands that it halt sensitive nuclear work but Tehran says the U.N. resolution is illegal.

Iran, which denies any intention of making atomic weapons, has said it may charge the two boatloads of British sailors and marines with illegally entering its waters in the northern Gulf. Britain insists they were operating in Iraqi waters.

"What we are trying to do ... is to pursue this through the diplomatic channels and make the Iranian government understand these people have to be released and that there is absolutely no justification whatever for holding them," Blair said.

"They have to release them. If not, then this will move into a different phase," he told Britain's GMTV television.

Blair's spokesman said the next step London could take would be to publish proof, in the form of global satellite positioning (GPS) records, that the sailors had not entered Iranian waters.

"We so far haven't made explicit why we know that because we don't want to escalate this," he said.

British officials had shown Iran data on the sailors' exact position when seized, a British government source told Reuters.

Britain has been assured the sailors are well but has not been given access to them or told where they are being held.

Britain and the United States led the diplomatic push for Iran to face sanctions over its nuclear program and have both accused Tehran of stoking Sunni-Shi'ite tensions in Iraq.

Washington broke ties with Tehran in 1980 after its diplomats were taken hostage in Iran, but Defense Secretary Robert Gates said on Tuesday the United States was now "open to high-level exchanges" with the Islamic Republic.

But, he warned, "we should have no illusions about the nature of this regime or about their designs for their nuclear program, their intentions for Iraq or their ambitions in the Gulf region," he said in a speech in Washington.

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British Foreign Secretary Margaret Beckett telephoned her Iranian counterpart on Tuesday to demand the sailors' release and spoke "in very robust terms" to "again demand their safe and speedy return and immediate consular access."