Iran and the US were locked in a bizarre war of words on Friday, after Tehran denied President Donald Trump's claim that a US Navy ship had "destroyed" an Iranian drone.

Mr Trump said on Thursday that the drone had flown to within 1,000 yards of the USS Boxer and had ignored "multiple calls to stand down" in the latest episode to stir tensions in the Gulf.

It was the first US military engagement with Iran following a series of increasingly serious incidents and the Trump administrator threatened more yesterday if Iranian planes flew too closely to its ships.

Abbas Araqchi, Iran's Deputy Foreign Minister, responded in a tweet this morning:

Brigadier General Abolfazl Shekarchi, an Iranian armed forces spokesman, added: “Despite Trump's baseless and delusional claims, all of (Iran's) drones... have safely returned to their bases."

Revolutionary Guards released footage from what it said was the downed drone. State TV, which broadcast it, claimed the timing notations showed it was still filming after Washington said it had been put out of action. The US said it had its own “clear evidence”, but it was not forthcoming.

Mr Trump announced that the USS Boxer, an amphibious assault ship, "took defensive action" against the Iranian drone as it was "threatening the safety of the ship and the ship's crew."

"The United States reserves the right to defend our personnel, our facilities and interests and calls upon all nations to condemn Iran's attempts to disrupt freedom of navigation and global commerce," he said.

A first-hand account from a journalist aboard the Boxer suggested that Iran had been harassing the navy ship before the drone was shot down.

US President Donald Trump meets with Dutch Prime Minister Mark Rutte in Washington on July 18 credit: REX

A Wall Street Journal reporter said that an unarmed Iranian navy Bell 212 helicopter flew alongside them, yards away from the deck, before it was chased away by a US helicopter.

The convoy of six US warships passed numerous Iranian speedboats without incident, but was then tailed by a larger Iranian warship which closed to within 500 yards of the Boxer.

An Iranian Y-12 surveillance plane was then pursued by US helicopters before a surveillance drone came even closer and was then brought down by electronic warfare jamming.

A series of attacks on oil tankers near the Persian Gulf has ratcheted up tensions between the US and Iran credit: AP

It came as a court in Gibraltar extended for 30 days the detention of an Iranian supertanker suspected of breaching European Union sanctions.

The fate of the Grace 1 has been at the centre of escalating tensions between the UK and Iran and seen as a pawn in the standoff between the Islamic Republic and the West.

Gibraltar denies that it was ordered to detain the vessel, which was carrying up to 2.1 million barrels of oil, but several diplomatic sources said the US asked the UK to seize it.

Tehran has threatened retaliation if its vessel was not released.

The decision suggested talks between Jeremy Hunt, Foreign Secretary, and Mohammad Javad Zarif, his Iranian counterpart, were not progressing.

Iran could decide to further disturb western shipping through the Strait of Hormuz, where a fifth of the world's crude is shipped through, if it feels Britain has not played “fair”.

Meanwhile, the Iraqi army said an unmanned aircraft dropped explosives on a base belonging to Iran-linked Shia paramilitary groups in northern Iraq on Friday morning, killing at least one person.

It was reported that ballistic missiles were being stored at the base, located in Salahuddin province.

No one claimed the hit, but the target suggested either Islamic State or Israel could be responsible.

While Israel has carried out such strikes against Iranian arms depots in Syria, it would be the first time in Iraq.