DUBAI • Iran said the wreckage of an American drone shot down last week was found 6.4km inside its territorial waters, in one of its most detailed accounts of an incident that brought the two countries to the brink of war.

"After the shooting down of the drone, initial actions were taken and its location was identified," Brigadier-General Majid Fakhri, the head of the Iranian Armed Forces' Geographical Organisation, was cited as saying by the Tasnim news agency. "The drone was definitely in the waters of Iran."

European powers are now attempting to convince Iran to continue abiding by the 2015 nuclear deal after Iranian officials warned that the country would breach the deal's cap on stockpiles of low-grade uranium by today.

Britain's ambassador to Teheran, Mr Rob Macaire, yesterday said extensive work was under way to boost a special mechanism designed to protect European trade with Iran from US sanctions and ease the economic pressure on Iranians. Russia, with deep political and economic ties to Iran, has denounced US efforts to raise pressure on Iran and this week backed Teheran's account of the downing of the US drone.

Moscow's special envoy, Mr Zamir Kabulov, yesterday said hopes for a diplomatic solution to the crisis were fading after the penalties imposed on Iran's Supreme Leader, Ayatollah Ali Khamenei.

"There is a very narrow window left because this is an absolutely insulting step for intergovernmental relations. But hope dies last," Mr Kabulov told reporters. "Iran will never be alone if, God forbid, the US ever takes absolutely crazy and irresponsible actions against it," he said. "Not only Russia, but many countries sympathise with Iran."

BLOOMBERG