'Missile strike' claim sparks scare

Iranian state television sparked an international scare and sent the price of oil rocketing when it claimed a missile had been fired from an aircraft close to its nuclear reactor.

A later report said that the explosion near the city of Dailam may have been caused by a fuel tank falling from an Iranian plane.

Matters later became even more confused when Iran's Revolutionary Guard said there had been no attack, but also denied the fuel tank explanation.

A spokesman for Iran's Interior Ministry said an explosion had been heard after a plane flew over the city and suggested it may have been caused by friendly fire.

Another government spokesman claimed that the explosion was caused by 'dam construction'. The confusion was then completed when the Deputy Interior Minister said there had been no signs of any explosion.

Al-Alam television originally said: "A powerful explosion was heard this morning on the outskirts of Dailam in the Bushehr province. Witnesses said that the missile was fired from an unknown plane 20 kilometres from the city."

The report came after an earlier claim by Iran that unmanned US drones had been flying over its nuclear sites.

Iran and Syria also announced today that they would form a 'common front' to face any threats.