Iranian President Mahmoud Ahmadinejad says 15 British naval personnel captured in the Gulf will be freed.
He repeated allegations that the British sailors and marines "invaded" Iranian waters, but said they would be freed as a "gift" to Britain.
He made the announcement at a news conference, in which he also awarded medals to the commanders who captured the British personnel in the Gulf.
Britain says the 15 were in Iraqi waters under a UN mandate.
Mr Ahmadinejad also criticised the US-led invasion of Iraq and Israel's war in Lebanon.
He used a news conference marking the Persian New Year to condemn the countries he said were behind "misery" and "destruction" in the world.
He said there did not appear to be anyone "to stand up and defend the rights of those oppressed".
He opened the news conference with references to the Islamic holy book, the Koran, then made a wide-ranging speech about the modern history of the Middle East, while attacking the West.
The invasion of Iraq was based on the false premise that Iraq had weapons of mass destruction, he said, but even now "the occupation forces continue to stay there and people are still being killed".
He repeated allegations that the British sailors and marines "invaded" Iranian waters, but said they would be freed as a "gift" to Britain.
He made the announcement at a news conference, in which he also awarded medals to the commanders who captured the British personnel in the Gulf.
Britain says the 15 were in Iraqi waters under a UN mandate.
Mr Ahmadinejad also criticised the US-led invasion of Iraq and Israel's war in Lebanon.
He used a news conference marking the Persian New Year to condemn the countries he said were behind "misery" and "destruction" in the world.
He said there did not appear to be anyone "to stand up and defend the rights of those oppressed".
He opened the news conference with references to the Islamic holy book, the Koran, then made a wide-ranging speech about the modern history of the Middle East, while attacking the West.
The invasion of Iraq was based on the false premise that Iraq had weapons of mass destruction, he said, but even now "the occupation forces continue to stay there and people are still being killed".