Iran denies market talk of strike on atomic sites

By Parisa Hafezi

TEHRAN (Reuters) - A senior Iranian nuclear official denied on Tuesday rumours of a strike on the country's nuclear sites that had unsettled financial markets.

"This is just a rumour. No attack against Iran's nuclear facilities has taken place," the official told Reuters, days after a report that Israeli jets had rehearsed a possible strike on the Islamic Republic.

In Jerusalem, an Israeli army spokesman told Reuters on Tuesday: "We are not aware of any such incident in Iran."

The New York Times on Friday quoted U.S. officials as saying Israel had carried out a large military exercise, apparently a rehearsal for a potential bombing of Iran's nuclear facilities.

The report of the Israeli manoeuvres has raised speculation about a possible attack on nuclear sites, which Israel and the United States say Iran is using to master technology so it can build nuclear weapons.

Iran denies the charge and insists its nuclear ambitions have the peaceful aim of generating electricity.

Washington says it wants a diplomatic solution to the nuclear row but has not ruled out military action if that route fails.

In response to Tuesday's rumour, a spokeswoman for the U.S. Fifth Fleet in Bahrain denied there had been any U.S. military strike against Iran.