LONDON (Reuters) - Iranian television on Wednesday displayed some of 15 British sailors and marines detained at sea last week and showed the only woman crew member saying they had “trespassed” into Iranian waters.

Britain, which earlier broke all official contacts with Iran except those related to the detained crew, said it feared they may have been coerced into appearing on television. It insists they were seized in Iraqi waters.

“It is completely unacceptable to parade our people in this way,” British Defense Minister Des Browne said.

After the broadcast, Iran’s foreign minister told Reuters London must accept the sailors were arrested in Iranian territory, while repeating an earlier announcement the woman would be freed “as soon as possible”.

London said it had no confirmation of any imminent release and demanded access to the group, detained at a time of high tension between Iran and Western countries over Tehran’s nuclear program.

Al-Alam, a state-run Arabic-language television channel, showed the woman, Faye Turney, and several of the other sailors in uniform eating off plastic plates in a well-lit room.

It also showed a separate interview with Turney, who British media said was married with a three-year-old daughter, wearing a black headscarf, smoking a cigarette and speaking about her detention and treatment.

“I was arrested on Friday the 23rd of March. Obviously we trespassed into their waters,” Turney said in an even voice. A letter from Turney to her parents, released by Iran, said she had written “to the Iranian people to apologize”.

Britain’s Defense Ministry said global positioning data showed the British sailors and marines were 1.7 nautical miles within Iraqi waters when they were captured by Iranian gunboats near the waterway that separates Iran and Iraq.

“The boats remained throughout well within Iraqi territorial waters,” Britain’s Deputy Chief of Defense Staff, Vice Admiral Charles Style, told a news conference.

“ROUTINE OPERATION”

Iran’s Foreign Minister Manouchehr Mottaki disagreed.

“The real picture is that the British sailors were arrested in the territorial waters of Iran ... this must be accepted by the government of the UK,” Mottaki told Reuters in Riyadh.

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British Foreign Secretary Margaret Beckett earlier told parliament Britain would freeze all official bilateral business with Iran apart from efforts to resolve the crisis.

“I am very concerned about these pictures and any indication of pressure on or coercion of our personnel who were carrying out a routine operation in accordance with international law,” Beckett said in a statement after the broadcast.

With the United States conducting naval exercises in the Gulf, the rising tension rattled global markets. Oil prices rose more than $1 a barrel on Wednesday to settle at around $64 after an overnight spike by as much as $5. Gold jumped to a four-week high on safe-haven buying before prices eased.

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The price rises were fueled by rumors, quickly denied, of a clash between Iran and U.S. military forces.

“Although it didn’t happen this time, people think it could happen,” said Christopher Bellew, a broker at Bache Financial.

For the first time since the U.S. invasion of Iraq in 2003, a second U.S. aircraft carrier, the John C. Stennis, arrived in the Gulf for previously scheduled naval war games.

Both the United States and Iran played down the U.S. naval exercises. Washington insisted they did not escalate tensions and a headline on Iranian state television screens read: “Iran: ‘no concern about Pentagon’s war games in the Persian Gulf’.”

A U.N. Security Council resolution passed at the weekend tightened sanctions against Iran over its nuclear program.

The Security Council wants Iran to stop enriching uranium, which could be used for weapons or power plants. Iran says its nuclear program is solely for peaceful purposes and calls the sanctions illegal.

British Prime Minister Tony Blair said the detention of the sailors was “wrong and illegal”.

The European Union backed Britain. Angela Merkel, chancellor of the bloc’s president Germany, said the EU extended its “absolute support and solidarity”.

UnderSecretary of State Nicholas Burns called Iran’s behavior “reprehensible”. “We and all the other allies and many other countries that aren’t even allied to Britain around the world think this is odious behavior on the part of the Iranian authorities,” he told BBC television.

Iran’s embassy in London said the British sailors and marines were 0.5 km inside Iranian waters at the time. Britain says its 15 personnel had searched a merchant ship in Iraqi waters, with a U.N. mandate, when they were captured.

In a similar incident, Iran freed eight British service members after holding them for three days in 2004, a time of less tension with the West. In 1979, Iranian students seized the U.S. embassy in Tehran and captured 90 hostages; 52 were held captive for 444 days.