updated 2/16/2005 6:24:18 PM ET 2005-02-16T23:24:18

An explosion in a southern city prompted instant fears Wednesday of a missile attack in an area where Iran has a nuclear facility, and Iranian authorities gave conflicting explanations for the blast — including Iranian friendly fire in a military area and construction work.

The explosion came hours after the country’s intelligence chief confirmed U.S. drones have been flying over Iran for months to spy on nuclear and military facilities. Also Wednesday, an Israeli official warned that Iran was just six months from knowing how to build a nuclear bomb.

U.S. and Israeli officials denied involvement with the blast, but it spiked oil prices and showed how jittery the world is that growing international pressure would lead to an attack on Iran.

The explosion near the southwestern port city of Deylam, about 110 miles from the Bushehr nuclear facility, was reported by Iranian state television, which said it may have been caused by a fuel tank dropping from an Iranian plane. A government spokesman said the blast may have been caused by friendly fire.

Rumors about blasts’ cause spread quickly
Later, a top security official said the blast was part of construction work on a dam. The official, Ali Agha Mohammadi of the Supreme National Security Council, said Iran’s enemies were not in a position to attack Iran.

“Such reports are mostly a psychological war,” he said.

The United States accuses Iran of having a secret program to make nuclear weapons. Iran insists its nuclear activities are for peaceful energy purposes.

The report of the explosion spread quickly, with some Iranians calling friends to tell them there had been an attack.

Reza Moghaddam, an engineer in the central city of Isfahan, called a friend in Tehran about rumors that the United States and Israel were attacking the Bushehr nuclear power plant.

Iran has been on the defensive recently about the possibility of military action by either the United States or Israel. Israel has warned that it may consider a pre-emptive strike against Iranian nuclear installations along the lines of its 1981 bombing of an unfinished Iraqi nuclear reactor near Baghdad.

Secretary of State Condoleezza Rice has said a military strike against Iran was “not on the agenda at this point,” but President Bush has said his administration wouldn’t take any option off the table.

Iran dismisses hostile attack reports
However, Interior Ministry spokesman Jahanbakhsh Khanjani dismissed rumors of a hostile attack and noted that Iranian military aircraft routinely fly in the area.

“There is a big possibility that it was a friendly fire by mistake,” he told The Associated Press. “Several such mistaken friendly fire incidents have been reported there in recent days.”

A senior army official, speaking on condition of anonymity, denied there had been any anti-aircraft fire and said there were no military exercises in the area at the time. The official also said the explosion did not stem from a hostile attack.

“It’s not very unusual that planes drop their additional fuel tank while flying but the general public assume it’s a bomb or missile attack. The army is investigating the incident,” he said.

White House press secretary Scott McClellan said there was no U.S. involvement, and CIA Director Porter Goss said he knew nothing about it.

Earlier Wednesday, Iran’s Intelligence Minister Ali Yunesi publicly confirmed for the first time that the United States has been flying surveillance drones over Iran’s airspace to spy on its nuclear and military facilities.

“Most of the shining objects that our people see in Iran’s airspace are American spying equipment used to spy on Iran’s nuclear and military facilities,” the minister told reporters.

Germany, Britain and France are leading European diplomatic efforts to persuade Iran to permanently abandon its uranium enrichment program, which the United States fears could be used to make nuclear weapons.

Foreign Minister Kamal Kharrazi urged the European Union on Tuesday to put more effort into negotiations. Iran has warned it will resume all nuclear activities it has suspended if talks don’t make progress by mid-March.

Associated Press and Reuters contributed to this report.

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