Britain on Saturday urged Iran to de-escalate tensions in the Gulf by releasing a UK-flagged ship it said had been illegally seized in Omani waters in an "utterly unacceptable" gambit.
Tehran was defiantly ignoring mounting European appeals to free the captured oil tanker and its mostly Indian crew, as the United States prepared to redeploy troops to Iran's regional arch-rival Saudi Arabia.
Iran's Islamic Revolutionary Guard Corps (IRGC) said it seized the Stena Impero ship on Friday for breaking "international maritime rules" in the Strait of Hormuz, a Gulf choke point for about a third of the world's sea-borne oil.
The oil tanker was impounded off Bandar Abbas port for allegedly failing to respond to distress calls and turning off its transponder after colliding with a fishing vessel, Iranian authorities said.
It came hours after a court in the British overseas territory of Gibraltar said it would extend by 30 days the detention of the Grace 1 Iranian tanker seized by British authorities in the Mediterranean two weeks ago on allegations of breaching EU sanctions against Syria.
"They see this as a tit-for-tat situation," British Foreign Secretary Jeremy Hunt said following talks with his Iranian counterpart Mohammad Javad Zarif and a meeting of the UK's emergency response committee.
"Nothing could be further from the truth." Hunt said that while the Grace 1 had been detained legally, "the Stena Impero was seized in Omani waters in clear contravention of international law. It was then forced to sail into Iran. This is totally and utterly unacceptable." Germany and France urged Iran to release the tanker, whose seizure Berlin called a "dangerous further aggravation of an already tense situation".
The European Union voiced "deep concern". US President Donald Trump said Friday's incident "only goes to show what I'm saying about Iran: trouble. Nothing but trouble." But Iran remained defiant.
Zarif said Iran's actions were taken to "uphold" international maritime rules. "It is IRAN that guarantees the security of the Persian Gulf & the Strait of Hormuz. UK must cease being an accessory to #EconomicTerrorism of the US," he tweeted.
Later on Saturday, NATO's spokesman joined calls condemning Iran's move, saying it was a "clear challenge to international freedom of navigation". It said all NATO allies were concerned by "Iran's destabilising activities".
Tensions in the Gulf have soared since May, with Trump calling off air strikes against Iran at the last minute in June after the Islamic republic downed a US drone.
The United States has also blamed Iran for multiple attacks on tankers in the Gulf. Iran said it had opened an investigation on Saturday into the newly-seized tanker. The IRGC released footage allegedly showing the capture operation.
Filmed from a ship and a helicopter, it shows small craft sailing alongside the ship, troops in balaclavas inside a chopper, and six people descending down a rope onto the vessel.
Owned by Swedish operator Stena Bulk, the tanker's crew of 23 consists of 18 Indians, three Russians, a Latvian and a Filipino.
New Delhi, Manila and Riga said they were in touch with Tehran to seek the release of their nationals.
Stena Bulk said its insurers had been in contact with the head of marine affairs at Bandar Abbas, who reported that the crew were in "good health".
A formal request is being prepared for a visit to the crew.
The head of marine affairs "confirmed to them that no instructions have been received so far as to what will happen to the ship".
As tensions soared, Saudi Arabia said it would once again host US troops to boost regional security.
The Pentagon said the deployment "ensures our ability to defend our forces and interests in the region from emergent, credible threats."
The US military also said its patrol aircraft were monitoring the Strait, and announced a "multinational maritime effort" to ensure freedom of navigation in key waterways.
The escalation comes more than a year after Washington unilaterally withdrew from the 2015 Iran nuclear agreement and began ratcheting up sanctions against Tehran.
Earlier this month, Iran exceeded the deal's caps on uranium enrichment, aiming to pressure the remaining parties -- including Britain, France and Germany, to make good on promises to help prop up its economy.
Tehran has repeatedly threatened to close the Strait of Hormuz if attacked.