Iran, US in war of words after US drone shot down

Iran on Thursday shot down a US military drone it said was on a spy mission over its territory, but Washington said the aircraft was targeted in international air space in "an unprovoked attack".

The incident fanned fears of wider military conflict in the Middle East as US President Donald Trump pursues a campaign of to isolate Iran over its nuclear and ballistic missile programmes and role in regional wars.

It was the latest in an escalating series of incidents in the Gulf region, a critical artery for global oil supplies, since mid-May including explosive strikes on six oil tankers as Tehran and Washington have slid towards confrontation.

Iran has denied involvement in any of the attacks, but global jitters about a new Middle East conflagration disrupting oil exports have triggered a jump in crude prices. They surged by more than $3 to above $63 a barrel on Thursday.

Saudi Arabia, Washington's main gulf ally, said Iran had created a grave situation with its "aggressive behaviour" and the kingdom was consulting other Gulf Arab states on next steps.

"When you interfere with international shipping it has an impact on the supply of energy, it has an impact on the price of oil which has an impact on the world economy. It essentially affects almost every person on the globe," Adel al-Jubeir, Saudi minister of state for foreign affairs, told reporters in London.

Tensions flared with Trump's withdrawal last year from world powers' 2015 nuclear accord with Iran and have worsened as Washington imposed fresh sanctions to throttle Tehran's vital oil trade and Iran retaliated earlier this week with a threat to breach limits on its nuclear activities imposed by the deal.

Upping the ante, Washington said on Monday it would deploy about 1,000 more troops, along with Patriot missiles and manned and unmanned surveillance aircraft, to the Middle East on top of a 1,500-troop increase announced after the May tanker attacks.

Iranian state media said the "spy" drone was brought down over the southern Iranian province of Hormozgan, which is on the Gulf, with a locally made "3 Khordad" missile.

A US official said the drone was a US Navy MQ-4C Triton and that it had been downed in international air space over the Strait of Hormuz, through which about a third of the world's seaborne oil exits the Gulf.

Navy Captain Bill Urban, a spokesman for the U.S. military's Central Command, said Iran's account that the drone had been flying over Iranian territory was false.