Iran's IRGC said on Wednesday it has released 10 American sailors who it had detained a day earlier, according to the Guards' statement broadcast on state television.
Iran detained the sailors aboard two U.S. Navy patrol boats in the Gulf on Tuesday in an incident that rattled nerves days ahead of the expected implementation of a landmark nuclear accord between Tehran and world powers.
"Our investigations show the two U.S. Navy boats entered Iranian territorial waters due to a broken navigation system," IRGC Rear Admiral Ali Fadavi was quoted as saying by the Tasnim news agency, which is close to the Guards.
The incident could exacerbate tensions between Iran and the United States. Some conservatives in both countries have criticized the nuclear deal, under which Iran will curb its nuclear activities in exchange for lifting of sanctions. The deal is due to be implemented in the coming days.
Iran's armed forces chief, Major General Hassan Firouzabadi, said the incident should demonstrate Iranian strength to "troublemakers" in the U.S. Congress, which has sought to put pressure on Iran after the nuclear deal.
And at a presidential campaign rally in the United States, Republican front-runner Donald Trump, who accuses President Barack Obama of being weak on foreign policy, described the incident as "an indication of where the hell we're going."
Attributing the boats' incursion into Iranian waters to a navigation error marked a de-escalation in rhetoric. Earlier, the Guards had said the boats were "snooping" in Iranian territory and said Foreign Minister Mohammad Javad Zarif had demanded an apology from Washington.
The IRGC, the Islamic Republic's praetorian guard, is highly suspicious of U.S. military activity near Iran's borders and many senior officers suspect Washington of pursuing regime change in Tehran.
The IRGC operates land and naval units separate to the regular armed forces and stages frequent wargames in the Gulf, which separates Iran from its regional rival Saudi Arabia and a U.S. naval base in Bahrain.
Last month, the U.S. Navy said an IRGC vessel fired unguided rockets near the aircraft carrier USS Harry S. Truman in the Strait of Hormuz, a critical shipping route for crude oil that connects the Gulf to the Indian Ocean. Iran denied the vessel had done so.
In April 2015, the Guards seized a container ship belonging to Maersk, one of the world's major shipping lines, in the Gulf because of a legal dispute between the company and Iran. The ship and its 24 crew members were released after 10 days.
The Guards have also seized British servicemen on two occasions, in 2004 and 2007, and a civilian British yacht crew in 2009. On each occasion the sailors were released unharmed after several days.