Fifteen British Navy personnel have been captured at gunpoint by Iranian forces, the Ministry of Defence says.
The men were seized at 1030 local time when they boarded a boat in the Gulf, off the coast of Iraq, which they suspected was smuggling cars.
The Royal Navy said the men, who were on a routine patrol in Iraqi waters, were understood to be unharmed.
The Foreign Office has demanded the immediate and safe return of the men, who are based on HMS Cornwall.
The frigate's commander, Commodore Nick Lambert, said he was hoping there had been a "simple mistake" over territorial waters.
"There is absolutely no doubt in my mind that they [British personnel] were in Iraqi territorial waters. Equally, the Iranians may claim they were in Iranian territorial waters.
"We may well find that this is a simple misunderstanding at the tactical level."
Helicopters had reported seeing two British boats being moved along the Shatt al-Arab waterway to Iranian bases and there had been no evidence of fighting, he added.
He said that despite scant communication, the 15 people were understood to be safe and had reacted in an "extremely professional way, in line with the rules of engagement".
"I look forward to seeing them on their return and congratulating them."
He said naval authorities were doing everything possible to ensure their safe return.
A Royal Navy spokesman at the ship's base in Devonport, Devon, said the families of those captured were not being informed yet, as they were all over Britain, and some may be on holiday.
The Ministry of Defence said: "The group boarding party had completed a successful inspection of a merchant ship when they and their two boats were surrounded and escorted by Iranian vessels into Iranian territorial waters.
"We are urgently pursuing this matter with the Iranian authorities at the highest level.
"The British government is demanding the immediate and safe return of our people and equipment."
The Iranian ambassador in London, Rasoul Movahedian, has met with officials at the Foreign and Commonwealth Office, after he was called there by Foreign Secretary Margaret Beckett.
There has been no immediate response so far from Iran, where many ministries and official buildings were closed for a public holiday.
Shadow foreign secretary William Hague and Sir Menzies Campbell, leader of the Liberal Democrats, have both backed the call for the group's immediate and safe return.
The incident comes at a time of renewed tensions with Iran over its nuclear programme, which Western powers fear could be used to develop a nuclear weapon.
British Army Colonel Justin Maciejewski, who is based in Iraq, said most of the violence against UK forces in Basra is being engineered by Iranian elements.
Col Maciejewski said Iran was providing "sophisticated weaponry" to insurgents and "Iranian agents" were paying local men to attack British troops.
Iranian officials have in the past denied such claims.
In 2004, Iran detained eight British servicemen for three days after they allegedly strayed over the maritime border.
The UK claimed the men were "forcibly escorted" into Iranian territorial waters.
While they were being held, the men were paraded blindfold and made to apologise on Iranian TV before their release was agreed.
The BBC's diplomatic correspondent James Robbins said the difference this time is that the present Iranian government under President Mahmoud Ahmadinejad was much more hardline.
"The political climate is worse with Britain among those confronting Iran over its controversial nuclear programme," he added.
Link:
http://news.bbc.co.uk/1/hi/uk/6484279.stm