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Last Updated: Wednesday, 16 February, 2005, 19:54 GMT
Iran blast cause remains mystery
Iranian authorities have been issuing confusing statements about an explosion in the southern province of Bushehr.

The cause of the blast near Daylam remains unclear, but officials are now saying it was caused by a controlled explosion in a dam building site.

Earlier an interior ministry spokesman said it might have been caused by a "friendly fire" incident.

Witnesses reported seeing a missile fired from an aircraft and also that an Iranian plane had dropped a fuel tank.

Iran state TV Al-Alam was the first to break the story, reporting a explosion near the Bushehr nuclear site, possibly caused by a rocket from an aircraft.

Then it changed its story to say the blast occurred near Daylam, around 150km (93 miles) north of Bushehr reactor, and might have been the result of an aircraft accidentally dropping its fuel tank.

Interior ministry spokesman Jahanbakhsh Khanjani told the AP news agency: "An airplane flew over Daylam today. Minutes later, there was an explosion.

"But we have no reason to say it's a hostile attack. There is a big possibility that it was a friendly fire by mistake."

Markets affected

As news of the blast reached financial markets, Brent crude oil prices jumped 2% in London, rising to $46.55 a barrel in 30 minutes.

They fell back later, closing at $46.30.

Iran's Supreme National Security Council said there was no incident and that people were stirring trouble with such reports, according to the BBC's Frances Harrison in Tehran.

She said the Supreme Council declared that reports of a blast near the nuclear plant were just part of an ongoing campaign of psychological warfare against Iran.

Denials have also been issued by Iran's interior ministry and the Russian Embassy, which has experts working on the reactor. The plant is not yet operational.

The official line from Tehran late on Wednesday was that the blast was caused by blasting work carried out during the construction of a dam.

Tensions between the US and Iran are running high over what the Americans say is Tehran's attempts to build a nuclear bomb.

Iran says its nuclear programme is entirely peaceful.



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