Iran ditches US report on downing its drone

DUBAI, July 19 (Reuters): Iran on Friday denied President Donald Trump's assertion that the U.S. Navy destroyed one of its drones, saying all of its unmanned planes were accounted for, amid growing international concern that both sides could blunder into a war in the Gulf.

In the latest episode to test nerves around the strategic waterway, Trump said on Thursday the drone had flown to within 1,000 yards (914 meters) of the US warship Boxer in a "provocative and hostile action" and had ignored several calls to stand down.

Iran dismissed the report.

"All drones belonging to Iran in the Persian Gulf and the Strait of Hormuz ... returned safely to their bases after their mission of identification and control," Abolfazl Shekarchi, a senior armed forces spokesman, was quoted as saying by the semi-official Tasnim news agency.

"And there is no report of any operational response by USS Boxer."

A U.S. official, speaking on condition of anonymity, said the drone on Thursday was brought down through electronic jamming.

Gulf tensions are high, with fears the United States and its longtime foe Iran could stumble into war. But despite tough talk on both sides, Washington and Tehran have shown restraint.

Tehran on Thursday signaled a willingness to engage in diplomacy with a modest offer on its nuclear work - ratification of a document prescribing more intrusive nuclear inspections if Washington abandoned its economic sanctions.

While U.S. officials suggested they viewed the idea as a non-starter, analysts said it could provide an opening for Trump's administration to pursue diplomacy.

German Chancellor Angela Merkel said that she was concerned about the situation in the Gulf.

"Of course I'm concerned. You can't look at this region without being concerned at the moment," Merkel told a news conference. "Every opportunity for diplomatic contact should be attempted to avoid an escalation."

In the latest development in a standoff between Iran and Britain that has also stoked Gulf tensions, Gibraltar's supreme court granted a 30-day extension to allow authorities to detain the Iranian oil tanker Grace 1 until Aug. 15.

Iran has vowed to respond to what it calls Britain's "piracy" over the seizure of the vessel.