DUBAI (Reuters/AFP) - Iran released ten United States sailors on Wednesday (Jan 13) after holding them overnight, bringing a swift end to an incident that had rattled nerves days ahead of the expected implementation of a landmark nuclear accord between Tehran and world powers.

Iran's Islamic Revolutionary Guards Corps (IRGC) said it had freed the sailors after determining they had entered Iranian territorial waters by mistake.

The sailors - nine men and a woman - had been detained aboard two US Navy patrol boats in the Gulf on Tuesday.

"Our technical investigations showed the two US Navy boats entered Iranian territorial waters inadvertently," the IRGC said in a statement carried by state television.

"They were released in international waters after they apologised," it added.

IRGC Rear-Admiral Ali Fadavi had earlier said that the two US Navy boats entered Iranian territorial waters due to a broken navigation system.

The release is a quick move to head off a potential crisis as it prepares for the lifting of sanctions. Teheran is set for the implementation of a nuclear deal with world powers aimed at ending its long international isolation.

Rear-Adm Fadavi said Iran had concluded that "this trespassing was not hostile or for spying purposes" and that the sailors had been in Iranian territory "due to a broken navigation system".

The Pentagon said there are no indications that the 10 sailors were harmed while in Iranian custody.

The carefully worded statement did not say how the sailors and their two riverine boats ended up being detained by Iran, saying only that "the Navy will investigate the circumstances that led to the sailors' presence in Iran".

US officials had earlier said one or both of the boats had suffered mechanical problems and been taken to Farsi Island, which lies roughly midway between Iran and Saudi Arabia in the Gulf and houses a base of the Revolutionary Guards, which has its own naval units.

Radio contact was lost with the two vessels - which US officials said were riverine patrol boats under 20m in length - while they were en route from Kuwait to Bahrain.

American officials did not dispute that the vessels appeared to have been in Iranian territorial waters when they were intercepted.

Senior US officials said they had received assurances from Teheran that the crews would be allowed to sail onwards come first light.

Iran said the US personnel, who it described as Marines, were in good health and being well treated in an "Islamic manner" in an "appropriate location".

Washington and Teheran have no diplomatic relations but US Secretary of State John Kerry called Iranian counterpart Foreign Minister Mohammad Javad Zarif to discuss the incident.

The two developed a close working relationship during the nuclear talks, which concluded in July with a deal between Iran and the so-called P5+1 powers of the United States, Britain, China, France, Russia and Germany.

"Mr Zarif had a strong stance and told Mr Kerry these were our territorial waters and you should apologise," Adm Fadavi said.

The drama unfolded as President Barack Obama gave his last State of the Union address, undermining any attempt to cite closer relations with Tehran as part of his legacy.

As Mr Kerry arrived at the Capitol to hear Mr Obama's speech, he told a CNN reporter the sailors would be freed "very soon".

"He has a close relationship with Foreign Minister Zarif and that would be a natural point of contact," White House communications director Jen Psaki told CNN.

"We have been in touch with the Iranians. We have been assured of their safety and that they will be able to move forward on their journey promptly," she said.

Mr Ben Rhodes, a top national security aide for Mr Obama, said the administration was "hopeful we will be able to resolve the issue".

The nuclear accord foresees Iran scaling back its nuclear programme to put a bomb outside its reach in exchange for relief from crippling international sanctions.

The deal is to be implemented very soon - Mr Kerry has said "in the coming days" - but has been criticised by Mr Obama's US opponents as too soft on Teheran.

These rivals seized on the incident in the Gulf to hammer on this point, demanding Mr Obama make a statement and warned Iran must release the sailors.

"Iran is testing the boundaries of this administration's resolve," Republican presidential hopeful Marco Rubio said.

The situation has been further complicated in the New Year by an angry breakdown in relations between Iran and US ally Saudi Arabia, inflaming regional tensions.

Iran's Revolutionary Guards often take a tough approach to perceived and real territorial violations in what it considers the "Persian Gulf".

Relations with Washington were strained by US claims last month that Iran fired missiles close to a US aircraft carrier in the Gulf.

Last year, Iranian patrol boats seized the Maersk Tigris, a cargo ship sailing under the Marshall Islands flag, which meant it was under US protection.

And in March 2007, Iranian patrols captured 15 British Royal Navy and Royal Marines personnel, interrogated them and held them for 13 days before releasing them.