Updated at 3:13 p.m. ET
TEHRAN, Iran - Military power near the strategic Strait of Hormuz could be bolstered by additional British forces, the country's defense secretary said Tuesday, as a defiant Iran shrugged off Europe's oil embargo and moved ahead with plans to hold naval exercises alongside the oil tanker shipping lanes it has threatened to block.
Tehran's bravado was in sharp contrast to the widening international pressures seeking to curb its nuclear program.
Australia became the latest country to shun Iranian oil, and the European Union's foreign policy chief traveled to Israel for talks certain to convey the West's belief that increasing economic isolation, rather than a push toward military action, is the most effective tool against Iran's leadership.
Iran also has accused Israel of masterminding a series of covert attacks such as a malicious computer virus designed to infiltrate uranium enrichment labs and targeted slayings of members of Iran's scientific community. Israel has made no direct comments on the claims, but dangled hints that clandestine operations are possible by Iran's many foes.
The EU on Monday joined Washington in backing sanctions targeting Iran's vital oil industry, which accounts for about 80 percent of its foreign currency revenues. The vote in Brussels came a day after a Western flotilla two British and French warships and the American aircraft carrier USS Abraham Lincoln's battle group entered the Gulf in a show of force against any Iranian attempts to disrupt the route for one-fifth of the world's oil.
Iran's commanders, meanwhile, are preparing their own message. Plans remain in place for the powerful Revolutionary Guard to send its maritime forces for maneuvers next month in the Strait, which is jointly controlled by Iran and Oman and has become the latest flashpoint for a potential military confrontation.
"Elements within the European Union, by pursuing the policies of the U.S. and adopting a hostile approach, are seeking to create tensions with the Islamic Republic of Iran," the official Islamic Republic News Agency quoted Ali Asghar Khaji, a senior foreign ministry official, as saying. He called the EU decision "irrational."
But other Iranian officials claimed the sanctions would not work and could even benefit OPEC giant Iran by driving up crude prices.
"The oil embargo will lead to higher prices. Europe will be the loser and Iran will earn more because of high prices," Iran's oil ministry spokesman, Alireza Nikzad Rahbar, told state TV.
Iran also summoned the Danish ambassador in Tehran over the EU's oil embargo. Denmark currently holds the EU presidency.
In London, Britain's Defense Secretary Philip Hammond said his country was ready to strengthen its military presence in the Gulf if needed.
The U.S.-led convoy of warships now in the Gulf which included Britain's HMS Argyll frigate and France's frigate La Motte Picquet sent "a clear signal about the resolve of the international community to defend the right of free passage through international waters," Hammond told reporters.
"We also maintain mine-counter measures vessels in the Gulf, which are an important part of the overall allied presence there, and of course the U.K. has a contingent capability to reinforce that presence should at any time it be considered necessary to do so," he added, accusing Iran of working "flat out" to produce a nuclear weapon.
Iran insists its atomic program is only aimed at producing energy and research, but has repeatedly refused to consider giving up its ability to enrich uranium. The U.S. and allies fear it could use its stockpile to one day produce weapons-grade material.
Hammond declined to offer specific details on what forces are currently in the Gulf, but said it had about 1,500 Navy personnel in the region east of Suez, which includes the Middle East and Indian Ocean, and a Royal Air Force base in Cyprus in the eastern Mediterranean.
Four anti-mine vessels are based out of Bahrain, which is also the base for the U.S. Navy's 5th Fleet. Britain also has two frigates including HMS Argyll three support ships, a survey vessel and one hunter-killer nuclear submarine in the region, the ministry said.
Last year, the U.K. created a Response Force Task Group drawn from a pool of warships and marines that can be deployed at short notice.
In Paris, French military spokesman Col. Thierry Burkhard said the French warship, which specializes in countering submarine attacks, has since separated from the British and American vessels, but remains on a "presence mission" in the Gulf.
France doesn't have plans to deploy more forces to the zone, said Burkhard, noting that France has a small base in the United Arab Emirates, which currently houses six Rafale warplanes and about 650 troops, including an infantry battalion.
The United States and allies already have warned they would take swift action against any Iranian moves to choke off the 30-mile wide Strait of Hormuz. The foreign minister from the wealthy Gulf state of Qatar which has close ties with the West and Iran called the waterway an international corridor that "belongs to the world."
But the primary objective of Western leaders appears to be waging an economic battle to weaken Iran's resolve.
In Israel, the EU's foreign policy chief Catherine Ashton began a three-day visit with a public agenda dominated by the stalled peace effort with Palestinians. The Western efforts to squeeze Iran, however, could overshadow the talks.
Washington and its European allies appear to strongly favor the path of tighter sanctions and diplomatic pressures on Iran. Evidence of its impact a plummeting Iranian currency and Iran's Asian oil customers considering looking elsewhere are used to counter calls by Israeli hard-liners and others for possible military strikes on Iran's nuclear facilities.
Ashton urged Iran to resume negotiations with world powers that broke off last year. Israel's Defense Minister Ehud Barak lauded the tighter European sanctions but appealed for even harsher measures.
"We think these are decisions in the right direction," he told reporters. "But it is very important to tighten them even more and add steps against the central bank and additional steps in order to force the Iranians to quickly reach a decision point of are they going to stop the military nuclear program or face the consequences of not stopping it."
In London, Australia's foreign minister, Kevin Rudd, said his country would join the EU's oil embargo though it was mostly a symbolic act since Australia imports very little Iranian oil. The 27-nation EU had been importing about 450,000 barrels of oil per day from Iran, making up 18 percent of Iran's oil exports.
Iran's Oil Ministry said the country can find new markets, though U.S. officials have been pressing Tehran's main Asian oil markets to turn away from Iran.
China which counts on Iran as its third-biggest oil supplier has rejected sanctions and called for negotiations over Iran's nuclear program. South Korea, which relies on Iran for up to 10 percent of its oil supplies, also has been noncommittal on sanctions.
Japan, which imports about 9 percent of its oil from Iran, has not made a decision on whether to reduce its imports. Foreign Minister Koichiro Gemba told parliament Tuesday that Japan hoped to cooperate with the international community, but stressed the need to keep oil prices stable while making sanctions effective.