US officials say rumor of Iran strike not true

WASHINGTON, Jan 18 (Reuters) US defense officials today said a rumored Iranian missile strike on a US naval vessel in the Gulf was not true.

''No such event took place,'' said one of the officials on condition of anonymity.

The bond market briefly pared losses on talk of possible military engagement between the United States and Iran, but turned back down after the Defense Department said the incident did not occur.

Tensions are high between Washington and Tehran. The United States accuses Iran of supporting insurgents in Iraq and charges that Iran is seeking nuclear weapons under the cover of a civilian energy program.

The Pentagon has increased the US military presence in the Gulf in recent weeks, a move widely seen as a warning against provocative actions by Iran.

Reuters LL RS2125