Iran's refusal to free 15 British sailors and marines seized in contested Persian Gulf waters is the country's way of telling the world that it cannot be pushed around - even with new international sanctions over its nuclear program.
The crisis, which began unfolding Friday when the British service members were taken captive, also shows that Iran has ways of creating problems for the West - especially in Iraq - if the U.S. and its allies make trouble for Tehran.
On Sunday, British Prime Minister Tony Blair raised the stakes in the standoff, insisting that the British were in Iraqi - not Iranian - waters and warning that Britain viewed their situation as "very serious."
"I want to get it resolved in as easy and diplomatic a way as possible," Blair said at a European summit in Berlin, adding that he hoped the Iranians "understood how fundamental an issue this is for the British government."
Britain said its diplomats met with Iranian officials in Tehran on Sunday where their demand for access to the group was denied after Iran refused to say where they were being held.
"This is a very serious situation," Blair said.
But Iran appeared equally resolute, suggesting the group may be put on trial for allegedly violating its waters when they boarded a merchant ship to search for smugglers at the mouth of the Shatt al-Arab waterway.
"The charge against them is the illegal entrance into Iranian waters and this issue is being considered legally," Iranian Foreign Minister Manouchehr Mottaki told reporters Sunday at the United Nations in New York.
"Iranian authorities intercepted these sailors and marines in Iranian waters and detained them in Iranian waters and this has happened in the past as well," Mottaki said.
Mottaki spoke one day after the U.N. Security Council voted unanimously to impose additional and tougher sanctions against Iran over its refusal to suspend uranium enrichment, a key step toward producing nuclear weapons. Iran insists that its program is for peaceful purposes.
Among other things, the new measures ban Iranian arms exports and freeze the assets of 15 individuals and 13 organizations and companies. About a third of those are linked to the Revolutionary Guard, an elite corps whose navy had seized the British sailors and marines.
At the same time, Iran is under pressure from the U.S. and Britain over allegations that Tehran is arming Shiite militias in Iraq. U.S. authorities are holding at least five Iranians, identified as part of an elite Revolutionary Guard unit, who were arrested in January in the northern Iraqi city of Irbil on suspicion of funneling weapons to Iraqi factions.
On Thursday, one day before the Britons were seized, the U.S. military announced the arrest of the purported leader of the pro-Iranian wing of the Mahdi Army militia in Iraq for his alleged role in the Jan. 20 sneak attack that killed five American soldiers in Karbala.
Ali Askari, former head of an elite unit of the Revolutionary Guard, disappeared in Turkey six weeks ago, and Iranian media have speculated that he was kidnapped by the Americans.
That has led to speculation in the Middle East that Tehran may offer to exchange the British sailors and marines for Iranians and Iranian agents held by the Americans in Iraq.
The Arabic language newspaper Asharq al-Awsat, which is published in London, reported this weekend that the seizure of the Britons was the first step in a plan by the Iranian Revolutionary Guards to win the release of Iranians held in Iraq.
"Orders were given to the marine units of the Guards to implement the first part of the plan which included besieging one of the British naval patrols in charge of combating smuggling and arrest the soldiers," the newspaper said, quoting unidentified Iranian military sources.
For their part, the Iranians have insisted that the Britons had violated Iranian territory and that the case would be handled through legal channels.
The official Islamic Republic News Agency, or IRNA, said that message was conveyed Sunday to British Ambassador Geoffrey Adams during a meeting with senior diplomat Ibrahim Rahimpour.
"Rahimpour expressed concern about escalation of tension in the region in the past four years since occupation of Iraq and said that Iran expected restoration of law and order in Iraq after collapse of Iraqi dictator Saddam Hussein, but, unfortunately continued occupation of Iraq created security problems on Iranian borders," IRNA said.
"Tehran has always exercised self-restraint in the face of border violations by the British troops so far," the Iranian agency said. "Therefore, it required an inquiry into such suspicious events."
Rajanews.com, a Persian Web site of supporters of Iranian President Mahmoud Ahmadinejad, quoted a senior diplomat as saying the Britons were still being held by Iranian armed forces and would not be released until they promised "not do similar things in future."
Last January, the official publication of the Revolutionary Guards, Sobh-e-Sadegh, said it would be easy to kidnap Americans and transfer them to "any location of choice" in retaliation for any attack against Iran.
But Ahmad Bakhshaysh, a political analyst and professor in politics at Tehran's Allameh University, said a prisoner swap was not what Iran wanted.
"Iran is not after retaliation regarding abduction of its diplomats. ... However, Iran will use this opportunity to show to the world public opinion that Britons were (the) invader and Iran was victim of the Westerners bullying policy," he said.
Clearly, the British want to keep the fate of their service members separate from other issues, such as sanctions or the situation in Iraq, the AP said.
Lord Triesman, a Foreign Office undersecretary, told Sky News there was good evidence the men were in Iraqi waters, but that the issue of whether the sailors had strayed into Iranian waters was only a technical one.
"I've been very clear throughout that the British forces do not ever intentionally enter into Iranian waters," he said. "There's no reason for them to do so, we don't intend to do so and I think people should accept there's good faith in those assertions."