DUBAI, United Arab Emirates (AP)  The U.S. military denied reports Tuesday that Iran fired a missile at a U.S. ship in the Persian Gulf.

The rumors of an attack had sent oil prices soaring, but Lt. Cmdr. Charlie Brown of the U.S. Navy 5th Fleet said all ships in the Gulf had been checked and the rumors were untrue.

Crude oil futures had jumped nearly eight percent Tuesday in a matter of minutes, topping $68.00 as rumors of a military confrontation in the Persian Gulf spurred panic buying, Dow Jones reported.

Rising tensions between Tehran and the West have created a potentially dangerous situation in the Gulf and markets are jumpy.

Tehran continues to hold 15 British sailors it captured on Friday, giving no indications of their whereabouts despite repeated pleas for their release from Britain, the United States and the European Union.

Meanwhile, the U.S. kicked off a military training operation in the Persian Gulf on Tuesday that commanders said was meant to send a warning to Iran. The operations are the largest show of U.S. force in the Gulf since the 2003 invasion of Iraq.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.