British officials say they have no idea where Iran is keeping 15 sailors and marines seized at gunpoint, while Prime Minister Tony Blair described the issue as "fundamental."

Iran has claimed the sailors confessed to illegally entering Iranian waters, but Blair dismissed the charge.

"It simply is not true that they went into Iranian territorial waters," Blair told reporters in Berlin.

He added he hoped the Iran "understood how fundamental an issue this is for the British government."

The Associated Press reports that British Foreign Secretary Margaret Beckett spoke by telephone with Iranian Foreign Minister Manouchehr Mottaki late Sunday. She reiterated her country's stance that the British sailors and marines were operating in Iraqi waters as they searched for smugglers.

Mottaki said his government was considering charges against the British sailors and marines.

"The Iranian authorities intercepted these sailors and marines in Iranian waters, and detained them in Iranian waters. This has happened in the past, as well," Mottaki said from New York in Persian through a translator.

The group includes eight Royal Navy members and seven Royal Marines.

On Saturday, they were interrogated and "confessed to aggression into the Islamic Republic of Iran's waters," Gen. Ali Reza Afshar told Iran's state news agency IRNA.

The group was detained in the Persian Gulf after boarding a merchant ship they believed was being used to smuggle cars into Iraq.

Britain said the incident took place in Iraqi waters where it has UN permission to routinely board and search merchant vessels for smuggled cargo.

However, Iranian officials are maintaining the British ship illegally entered Arvand Roud, which is the Iranian name for the Shatt al-Arab waterway that separates Iran from Iraq.

The sailors were taking part in routine boarding operations at about 10:30 a.m. Friday and are believed to be unharmed.

"The 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," the British defence ministry said in a statement.

A British navy commander says he is using all the resources he has to ensure the safe return of the sailors.

"Absolutely everything that could possibly be done, is being done," Cmdr. Nick Lambert told reporters.

"We're only a few hours after the event and we've now got as clear a picture of what happened as we could possibly have. All of my authority on the coalition side, and up to the highest levels in the U.K. government, are involved in assuring as quickly as we can, the safe return of my people to HMS Cornwall."

The U.S. has confirmed it has no troops involved in the situation, but said it is monitoring the situation closely.

In 2004, eight British sailors were detained in the Persian Gulf under similar circumstances. They were released after three days of tough diplomatic talks.

With a report from CTV's Tom Clark and files from The Associated Press