Iran's war games in the Persian Gulf began earlier than usual this year with a display of new attack speed boats and rhetoric.
Iran's seizure of five British yachtsmen of its coast last week highlights the growing role of the country's Revolutionary Guard along a vital oil shipping lane.
Tehran dismisses latest UN offer on nuclear program, prolonging the debate over more sanctions.
The US also hopes to establish a diplomatic presence in Tehran for the first time in 30 years, according to the Guardian newspaper.
Iran tested the Shahab-3 missile, which could hit Israel or US Mideast bases.
Optimistic comments from the Iranian foreign minister suggest that an accord with West may yet be reached.