Iranian President Mahmoud Ahmadinejad insisted Saturday that 15 captured British sailors trespassed in Iranian waters and called world powers "arrogant" for failing to apologize, the country's official news agency reported.

"Instead of apologizing over trespassing by British forces, the world arrogant powers issue statements and deliver speeches," IRNA quoted Ahmadinejad as saying during a speech in the southeastern city of Andinmeshk.

"The British occupier forces did trespass our waters. Our border guards detained them with skill and bravery. But arrogant powers, because of their arrogant and selfish spirit, are claiming otherwise," the hard-line leader told the crowd who was celebrating the Persian New Year holiday, IRNA said.

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Ahmadinejad's comments Saturday were not his first about the incident. On Thursday, he accused Britain of trying to solve the crisis through propaganda and not diplomacy, state TV reported.

Earlier Saturday, Iran's ambassador to Moscow denied he had said the British sailors and marines seized by Iran in the Gulf eight days ago may face trial, the official IRNA news agency reported.

IRNA had earlier carried a report saying the envoy, Gholamreza Ansari, had made the comments to Russian television on Friday evening.

"Iran's ambassador to Russia denied comments that a Russian television channel said he had made about the possibility of British soldiers going on trial in Iran," it said in a later news item.

Ansari told IRNA he had said the case had entered a "legal phase". But he added the television channel had made a "translation mistake and reported the possibility of them facing a trial."

On Friday, Ambassador Gholam-Reza Ansari told Russian television channel Vesti-24, "It is possible that the British soldiers who entered into Iranian waters will go on trial for taking this illegal action," according to Iran's IRNA news agency.

Britain said on Saturday it was concerned at Iranian "sabre-rattling" and for the first time voiced regret that the incident had occurred.

"Obviously, I am concerned. It is not the first person to have made sabre-rattling noises," Foreign Secretary Margaret Beckett told reporters after a European Union foreign ministers' meeting in Germany.

But she struck a conciliatory note when asked by an Iranian television reporter if she had a message for Iran, saying: "The message I want to send is I think everyone regrets that this position has arisen. What we want is a way out of it."

Britain has sent Iran a written response to its note on the detention of 15 British naval personnel in the Gulf eight days ago, Beckett said on Saturday.

Speaking to reporters at an EU foreign ministers' meeting, she said, "We have made our response and we are now beginning to discuss. As you may know it's a holiday period in Iran and it's perhaps not too helpful.

Ansari also reiterated Iran's stance that the British government could resolve the crisis by admitting the sailors entered Iranian waters.

"If the U.K. government admits its mistake and apologizes to Iran for its naval personnel's trespassing of Iranian territorial waters, the issue can be easily settled," he said.

The diplomat claimed the British government had escalated the crisis by taking the matter to the UN Security Council rather than resolving it on a bilateral basis.

"The legal phase concerning these British soldiers has started and if charges against them are proven, they will be punished," said Ansari.

Also on Friday, Iran's embassy in London released a third letter purporting to be from captured British sailor Faye Turney, in which she wrote she had been "sacrificed due to the intervening policies of the Bush and Blair governments."

"It is now time to ask our government to make a change to its oppressive behavior towards other people," the letter said.

Iran's London embassy and state television has released several letters from Turney and broadcast footage of the captured sailors confessing to their illegal entry into Iranian water and saying they are being well looked-after.

"Whereas we hear and see on the news the way prisoners were treated in Abo-Ghrayb (sic) and other Iraqi jails by British and American personnel, I have received total respect and faced no harm," the third letter read.

She said the incident had caused "even more distrust for the people of Iran, and the whole area in the British (sic)."

"I believe that for our countries to move forward we need to start withdrawing our forces from Iraq and leave the people of Iraq to start rebuilding their lives," the letter said.

Britain's Foreign Office denounced Iran Friday for broadcasting footage of a captured marine confessing to illegally entering Iranian waters.

"Using our service men in this way for propaganda reasons is outrageous," said a Foreign Office spokesman, speaking on condition of anonymity in line with department policy.

In pictures broadcast on the Iranian government's Arabic-language TV channel Al-Alam, the serviceman, who was identified as Nathan Thomas Summers, admitted to trespass.

"We illegally trespassed on Iran's territorial waters and were arrested by the Iranian border guards and I would like to apologize to the Iranian people for the issue," Summers said.

He was shown sitting with another serviceman and Turney against a floral curtain. Both servicemen wore camouflage fatigues with a Royal Navy label on their chests and a little British flag stitched to their left sleeves.

Britain also said Friday it was giving serious consideration to a letter from Iran that appeared to offer hope for a breakthrough in the standoff over freeing 15 British navy personnel and ending the crisis over their capture.

The British government did not elaborate on the contents of the Iranian letter, which was delivered to the British Embassy in Tehran late Thursday.

"We can confirm that as reported in the Iranian media, that the Iranian government has sent a formal note to the British Embassy," a spokeswoman said. "Such exchanges are always confidential but we are giving the message serious consideration and will soon respond formally to the
Iranian government."

The letter stopped short of asking for a formal apology but instead asked for Britain to acknowledge its sailors had trespassed into Iranian waters and come to an agreement that it would not happen again.

The letter appeared to signal a softening of Tehran's position, offering some hope for an end to the crisis.

In the letter the Iranian government said it protests strongly against this illegal act in violating Iranian territorial waters and called on Britain to guarantee to avoid the recurrence of such acts.

Turkey, meanwhile, said Iran is willing to reconsider the possible release of the only female captive, Faye Turney. Turkish Prime Minister Recep Tayyip Erdogan called Iranian President Mahmoud Ahmadinejad Thursday evening to discuss the captive military personnel, said Erdogan's spokesman, Akif Beki.

Iranian state television said Ahmadinejad accused Britain of using propaganda rather than trying to solve the matter quietly through diplomatic channels.

Turkey, the only Muslim country in NATO, considers itself a bridge between the West and the Muslim world and maintains good relations with Iran. The Turks have also urged Iran to let a Turkish diplomat meet with the detainees and to free Turney.

State television also broadcast a video it said showed the operation that seized the British sailors and marines. In the clip, a helicopter hovers above inflatable boats in choppy seas, then the Royal Navy crews are seen seated in an Iranian vessel.

Crude oil prices rose to a new six-month high, above $66 a barrel, on concerns that the tensions with Iran could jeopardize oil exports as U.S. gasoline supplies wane and demand swells.