A video grab off the Iranian Arabic-language television station Al-Alam shows British servicewoman Faye Turney (R) eating with the British sailors seized last week at gunpoint by Iran in northern Gulf waters. Iran on Wednesday showed the first pictures of 15 detained British navy personnel after Britain froze contacts between the two in an escalating dispute over the captives.[AP]

RIYADH, Saudi Arabia - Iran's foreign minister said Wednesday that Britain must admit that its 15 sailors and marines entered Iranian waters in order to resolve a standoff over their capture by the Mideast nation.

Manouchehr Mottaki's statement in an interview with The Associated Press came on a day of escalating tensions, highlighted by an Iranian video of the detained Britons that showed the only woman captive saying her group had "trespassed" in Iranian waters. Britain angrily denounced the video as unacceptable and froze most dealings with the Mideast nation.

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Mottaki said that if the alleged entry into Iranian waters was a mistake "this can be solved. But they have to show that it was a mistake, that will help us to end this issue."

"Admitting the mistake will facilitate a solution to the problem," he said late Wednesday night in Riyadh, Saudi Arabia, where he was attending a summit of Arab leaders.

It was the first time that Iran has publicly suggested a way to resolve the crisis, but British acquiescence appeared unlikely as the country has been insisting since the crisis began that its troops were in Iraqi waters and released documents on Wednesday to back up the claim.

There was no immediate comment from the British to Mottaki's statement. A call to Britain's Foreign Office in London was not answered early Thursday.

Mottaki also backed off a prediction that the female sailor, Faye Turney, could be freed Wednesday or Thursday, but said Tehran agreed to allow British officials to meet with service personnel.

"We have accepted that (the British request), there is no problem. Measures are underway (to arrange meeting.) They can meet them," he said.

British Prime Minister Tony Blair's government announced it was freezing all dealings with Iran except to negotiate the release of its personnel, adding to a public exchange of sharp comments that helped fuel a spike in world oil prices.

Britain's military released a GPS readout it said proved the Royal Navy personnel were seized 1.7 nautical miles inside Iraqi waters Friday. But Mottaki said Iran had GPS devices from the British boats that showed they were in Iranian territory.

A few hours later, a brief video of the captured Britons was shown on Iran's Arabic language satellite television station, Al-Alam.

One segment showed sailors and marines sitting in an Iranian boat in open waters immediately after their capture.

The video also displayed what appeared to be a handwritten letter from Faye Turney, 26, to her family.

"I have written a letter to the Iranian people to apologize for us entering their waters," it said. The letter also asks Turney's parents in Britain to look after her 3-year-old daughter, Molly, and her husband, Adam.

The video showed Turney in checkered head scarf and her uniform eating with other sailors and marines. Later, wearing a white tunic and black head scarf, she sat in a room before floral curtains and smoked a cigarette.

Turney was the only detainee to be shown speaking, giving her name and saying she had been in the navy for nine years.

"Obviously we trespassed into their waters," Turney said at one point, her voice audible under a simultaneous Arabic translation. "They were very friendly and very hospitable, very thoughtful, nice people. They explained to us why we've been arrested. There was no harm, no aggression."

In backing away from predictions that Turney could be freed Wednesday or Thursday, Mottaki said Iran will look into releasing her "as soon as possible."

Asked when Iran would release Turney, Mottaki said in the interview with the AP, "We will look into this as soon as possible."

He said earlier reports that he had said she could be freed Wednesday or Thursday were incorrect. "I was probably misquoted," he said.

Earlier in the day, Mottaki told AP on the sidelines of an Arab summit in the Saudi capital, "Today or tomorrow, the lady will be released." The Turkish television station, CNN-Turk, had also reported him saying Wednesday she would be freed "today or tomorrow."

But the talk of releasing Turney did little to calm British anger.

Before the broadcast, a spokesman for Blair said any showing of British personnel on TV would be a breach of the Geneva Conventions.

After the footage was aired, Foreign Secretary Margaret Beckett said she was "very concerned about these pictures and any indication of pressure on, or coercion of, our personnel. ... I am particularly disappointed that a private letter has been used in a way which can only add to the distress of the families."

The third Geneva Convention bans subjecting prisoners of war to intimidation, insults or "public curiosity." Because there is no armed conflict between Iran and Britain, the captives would not technically be classified as prisoners of war.

Blair told the House of Commons that "there was no justification whatever ... for their detention, it was completely unacceptable, wrong and illegal."

"We had hoped to see their immediate release; this has not happened. It is now time to ratchet up the diplomatic and international pressure in order to make sure the Iranian government understands its total isolation on this issue," he said.

Beckett said Britain would focus all its efforts on resolving the issue.

"We will, therefore, be imposing a freeze on all other official bilateral business with Iran until the situation is resolved. We will keep other aspects of our policy towards Iran under close review and continue to proceed carefully. But no one should be in any doubt about the seriousness with which we regard these events," she said.

The statement appeared to refer to diplomatic dealings rather than business relations, but Britain's Department of Trade said the country does not buy oil directly from Iran.

Oil prices rose by more than $1 a barrel Wednesday to a six-month high amid worries about the standoff, which came as the U.S. Navy is carrying out its largest show of force in the Persian Gulf since the 2003 invasion of Iraq.

President Bush discussed the 15 Britons with Blair over a secured video conference call Wednesday, White House deputy press secretary Dana Perino said. "The president fully backs Tony Blair and our allies in Britain," she said.

British officials have said the 15 Britons were taken captive after completing a search of a civilian ship near the mouth of the Shatt al-Arab waterway, which forms the border between Iran and Iraq.

Soon after the sailors and marines were seized, Britain had hoped to resolve the issue quickly. In 2004, six British marines and two sailors were captured by Iran in the Shatt al-Arab but released within days.

In London, British military officials released new information about the location where they said the Britons and their two inflatable boats were seized by Iranian naval forces.

The military said satellite positioning readings showed the vessels were 1.7 nautical miles inside Iraqi waters.

Vice Adm. Charles Style gave the satellite coordinates as 29 degrees 50.36 minutes north latitude and 48 degrees 43.08 minutes east longitude. He said that position had been confirmed by an Indian-flagged merchant ship boarded by the sailors and marines.

He also told reporters the Iranians had provided a geographical position Sunday that he said was in Iraqi waters. By Tuesday, he said, Iranian officials had given a revised position 2 miles to the east, inside Iranian waters.

"It is hard to understand a legitimate reason for this change of coordinates," Style said.