TEHERAN - IRAN charged three Americans it captured in July near the border with Iraq with espionage on Monday, prompting Washington to demand the release of what it says are innocent hikers.

Teheran's chief prosecutor Abbas Jaffari Doulatabadi said investigations were continuing against the trio, Shane Bauer, 27, Sarah Shourd, 31, and Josh Fattal, 27, the official IRNA news agency reported. A statement on their case is to be made in the near future.

'The three Americans arrested near the border of Iran and Iraq are facing charges of spying and the inquiry is continuing,' he said.

The United States called for the swift release of the three, insisting they were wrongly detained.

'If it is true that they have been formally charged, we would find this outrageous. And, of course, the families would find it devastating,' US State Department spokesman Ian Kelly said.

At the White House, spokesman Robert Gibbs said the three were 'innocent young people, who should be released by the Iranian government. Their release should be expedited.' But Iranian President Mahmoud Ahmadinejad insisted that justice needed to run its course. -- AFP