A similar incident happened in 2004...in the same area. The sailors were paraded on TV blindfolded for three days, and made to admit they were in Iranian waters, and then released.
Here is a pretty clear rundown of the situation, though there is considerable dispute about the location of the incident. It occurred in a waterway that divides Iraq from Iran. http://news.bbc.co.uk/2/hi/middle_east/3828377.stm
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