By Najmeh Bozorgmehr and Gareth Smyth Tehran
Iranian state radio reported on Thursday that three gun-boats seized from British forces in June were to be put on public display.
The radio said the boats - which were being delivered to the Iraqi river police - would go on show in Arvand-Kenar, in Khuzestan province.
This is near where they were seized by Iranian Revolutionary Guards (IRGC) on the waterway called the Shatt al-Arab by Iranians and Arvand Rud by Iranians, which marks the most southerly stretch of the Iran-Iraq border.
The radio gave no further details, and there was no immediate confirmation from official news agencies.
But the Foundation to Safeguard and Spread Values of Holy Defence, an affiliate of Iran's armed forces, said the boats were already on display.
"They are part of an exhibition of martyrdom that opened on March 4 and will close on 7 April," said a foundation official.
"We are organising parties of students, among others, to visit. The exhibition is open to all."
"We cannot comment on a rumour," said a British embassy official.
Iran resumes talks next Thursday in Geneva with Britain, France and Germany (the EU3) centred on its controversial nuclear programme.
While Iran considers Britain to be a key player in the talks, Iranian officials have recently taken umbrage at UK officials' remarks that Tehran should give up permanently its enrichment of uranium, a demand Iran has rejected. Hassan Rowhani, Iran's chief nuclear negotiator, cancelled a recent scheduled visit to Britain.
The seizure of the naval vessels was a propaganda coup for the IRGC, and showed their growing influence in the face of US-led international pressure on Iran.
British officials at first apologised for the craft straying on to the Iranian side, but once the six marines and two sailors aboard were freed after being displayed on Iranian television walking round blindfolded, Geoff Hoon, the defence secretary, claimed they had been snatched from Iraqi waters.
Separate from the regular army, the 125,000-strong IRGC sees itself as the steadfast defender of the Islamic revolution and is answerable to Ayatollah Ali Khamenei, Iran's supreme leader.
The decision to put the boats on display reflects Iran's confidence in the face of pressure from the Bush administration, not only over Tehran's nuclear programme but also over the disarmament of Hizbollah, the Lebanese Shia party close to Tehran, and for the withdrawal of Syrian troops from Lebanon.
This week's Hizbollah demonstration in Beirut - which drew at least 500,000 people and far outnumbered earlier anti-Syrian protests - confirmed Iranian officials' judgement that Hizbollah has widespread support in Lebanon, based mainly on its role in defending the country against Israel.
"Hizbollah's popular support, combined with careful and logical leadership, makes it strong," Mohammad Ali Abtahi, the former reformist vice-president, told the FT.
"The Syrian presence was hard for many Lebanese to accept, but the existence of a Lebanese force defending the country [Hizbollah"> is different."