Iran's navy chief said today his forces plan to hold a 10-day drill in international waters beyond the strategic Strait of Hormuz at the mouth of the Persian Gulf - an exercise that could bring Iranian ships close to US Navy vessels.

The drill will be Iran's latest show of strength in the face of mounting international criticism over its nuclear programme, which the West fears is aimed at producing atomic weapons - charges that Tehran denies.

The Strait of Hormuz is of strategic significance as the passageway for about a third of the world's oil tanker traffic. Beyond it lie vast bodies of water, including the Arabian Sea and the Gulf of Aden.

The US Navy's Bahrain-based Fifth Fleet is also active in the area, as are warships of several other countries that patrol for pirates there.

Both the US and Israel have not ruled out a military option against Iran over its nuclear programme, while Iranian hard-liners have come out with occasional threats that Tehran would seal off the key waterway if others moved against the country's nuclear facilities.

Admiral Habibollah Sayyari told Iranian state TV that the manoeuvres, dubbed Velayat-90, will begin on Saturday off the southern edge of the Arabian Peninsula and into the Gulf of Aden, near the entrance to the Red Sea.

Iran regularly holds war games and has also been active in fighting piracy in the Gulf of Aden.

Sayyari denied an Iranian media report from last week that the drill would close the Strait of Hormuz. "There has been no decision yet on this," he told the official IRNA news agency.