Britain failed to win support for a stronger statement deploring weeklong Iran's detention of the Britons and calling for their immediate freedom, primarily because of Russian opposition.
Britain sought Security Council help as Iran rolled back on its promise to release Faye Turney, the sole woman among the captives, and a senior Iranian official suggested all 15 Britons might be put on trial.
Instead of freeing Turney as promised, Iran released another letter from her admitting the British sailors violated Iranian territorial waters, reports CBS News national security correspondent David Martin.
According to U.S. intelligence, there is chaos in Tehran over what to do with the hostages. But for now they are under control of the Revolutionary Guard, and that is bad news.
"These people are so hard-line I think it doesn't even merit the word 'hard-line," said Simon Henderson of the Washington Institute for Near East Policy. "They're way beyond that."
Turkish Prime Minister Recep Tayyip Erdogan urged Iranian President Mahmoud Ahmadinejad to allow a Turkish diplomat to meet with the British captives and also urged the release of Turney, Iranian state television reported.
British Foreign Secretary Margaret Beckett condemned Iran's use of Turney for what she called "propaganda purposes," calling it "outrageous and cruel."
The standoff and broader tensions in the Persian Gulf region helped fuel a spike in world oil prices.
Also Thursday, Iranian TV broadcast about five seconds of video it says was of the operation that seized the British sailors and marines. In the video, a helicopter is shown hovering above inflatable boats in choppy seas. Then, the British seamen and marines appear seated in an Iranian boat.
The video showed a coast guard officer identified only as Col. Setareh, who displayed a GPS device purported to belong to the British crew. He said it proved the British had "violated Iranian waters" several times before they were detained.
The British draft language sent to the Security Council was in the form of a press statement. The text circulated to the 14 other council members said: "Members of the Security Council deplore the continuing detention by the government of Iran of 15 (United Kingdom) naval personnel."
It added that the British crew was "operating in Iraqi waters as part of the Multinational Force-Iraq under a mandate from the Security Council under resolution 1723 and at the request of the government of Iraq" and it called for their "immediate release."
A press statement is the weakest action the Security Council can take, but must be approved by all council members.
The council diplomats said informal discussion of the British proposal indicated the issue of where the incident took place raised problems for some council members, including Russia. Some members also want to hear the Iranian side, the diplomats said, speaking on condition of anonymity because the discussions were private.
Britain said its sailors and marines were seized Friday after completing a search of a civilian ship near the mouth of the Shatt al-Arab waterway, which forms the border between Iran and Iraq. Iran says the Britons were inside its territorial waters.
Prime Minister Tony Blair said Britain would not negotiate for the captives.
"What you can't do is end up negotiating over hostages; end up saying there's some quid pro quo or tit for tat; that's not acceptable," he said.
Blair's office dismissed a suggestion by Iranian Foreign Minister Manouchehr Mottaki that Britain should resolve the crisis by admitting that its personnel had made a "mistake" and crossed into Iranian waters.
Mottaki had said Wednesday that Turney would be released within 48 hours. Britain said it was halting all discussion with Iran except negotiations to free the sailors, and expressed outrage over Iran's broadcast of images of the captives.
Top Iranian negotiator Ali Larijani said on Iranian state radio that "British leaders have miscalculated this issue."
If Britain follows through with its policies toward Iran, Larijani said "this case may face a legal path," a clear reference to Iran's prosecuting the sailors in court.
Blair's official spokesman said Britain wanted to resolve the crisis quickly and without having a "confrontation over this."
"We are not seeking to put Iran in a corner. We are simply saying, 'Please release the personnel who should not have been seized in the first place,"' said the spokesman, speaking on condition of anonymity in line with government policy.
But in a briefing to reporters, the spokesman said British officials had been angered by Tehran's decision to show the captives on Iranian television.
"Nobody should be put in that position. It is an impossible position to be put in," he said. "It is wrong. It is wrong in terms of the usual conventions that cover this. It is wrong in terms of basic humanity."
Beckett said there were "grave concerns about the circumstances in which it was prepared and issued. This blatant attempt to use Leading Seaman Turney for propaganda purposes is outrageous and cruel."
In the video broadcast Wednesday on Iran's Arab-language satellite channel, Turney said her group had "trespassed" in Iranian waters. The segment showed her wearing a black head scarf, sitting in a room before floral curtains and smoking a cigarette.
"Obviously we trespassed into their waters," Turney said. "They were very friendly and very hospitable, very thoughtful, nice people. They explained to us why we've been arrested. There was no harm, no aggression."
In Thursday's video from Iran that was shown on Sky News, another letter apparently written by Turney called for withdrawal of British troops from Iraq.
The letter asked British lawmakers: "Isn't it time to start withdrawing our forces from Iraq and let them determine their own future?"