Peace - This really has nothing to do with Iraq and all to do with US/British and Iranian relations. We know the Brits are there to 'help' Iraq but what were they doing in Iranian waters? - or were they in Iraqi waters? Thats the central question and one that is not likely to be answered since there are very few, impartial, eye witnesses(unless you count the fisherman).

For something other than the U.S./British perspective, read this:

http://www.atimes.com/atimes/Middle_East/IC30Ak04.html

"According to an Iranian political analyst seasoned in "threat analysis", Iran's ability to play hardball with Britain serves the national interest at a time when Western powers manipulate the Middle East landscape almost at will. "Iran is sending a clear message that the 'buck stops here'," he told the author.

Apparently, the message is not lost on Iran's neighbors, and at the opening ceremony of an Arab summit in Riyadh, Saudi King Abdullah warned "foreign powers" to stop meddling in the affairs of the region, since the days when they could impose their wills on the people of the region had passed."

And lest you think this source is unreliable, Kaveh L Afrasiabi, PhD, is the author of After Khomeini: New Directions in Iran's Foreign Policy (Westview Press) and co-author of "Negotiating Iran's Nuclear Populism", Brown Journal of World Affairs, Volume XII, Issue 2, Summer 2005, with Mustafa Kibaroglu. He also wrote "Keeping Iran's nuclear potential latent", Harvard International Review, and is author of Iran's Nuclear Program: Debating Facts Versus Fiction.