TEHRAN, Iran - An Iranian diplomat in Iraq seized two months ago by uniformed gunmen has been released, Iran reported Tuesday, while in Baghdad a senior foreign ministry official said his government was "intensively" seeking the release of five Iranians detained there by the US.

A video grab taken from IRINN Iranian TV shows a detained British sailor speaking in front of a chart of the Gulf waters. Prime Minister Tony Blair warned Iran on Tuesday that his government would have to take increasingly tough decisions if 15 captive sailors are not quickly released. [Agencies]

The developments came as British Prime Minister Tony Blair said the next two days would be "fairly critical" to resolving the dispute over a British navy crew seized by Iran.

The Iraqi official also said Iraq had exerted pressure on those holding the Iranian diplomat, Jalal Sharafi, who was released Monday and returned to Tehran on Tuesday. The official would not say who had custody of the diplomat.

A senior government official, however, said Iraqi intelligence had held the Iranian diplomat. Both officials spoke on condition of anonymity because they were not authorized to release the information.

Sharafi was seized on Feb. 4 when his car was intercepted by vehicles carrying armed men in the Karradah district of Baghdad. The gunmen, who wore Iraqi uniforms, forced him into one of their vehicles and sped away.

Iran's official Islamic Republic News Agency confirmed Sharafi's release but gave no indication of the circumstances surrounding his Feb. 4 disappearance or his release. In January, the US military seized five Iranians in a raid in northern Iraq, accusing them of links to an Iranian Revolutionary Guard faction that funds and arms insurgents and militias in Iraq.

Two days after the raid, Secretary of State Condoleezza Rice said President Bush approved the strategy of raiding Iranian targets in Iraq as part of efforts to confront the government in Tehran.

Iran had insisted that the five detained Iranians were engaged exclusively in consular work.

"We are intensively seeking the release of the five Iranians," the Iraqi foreign ministry official said. "This will be a factor that will help in the release of the British sailors and marines."

An official at the Iranian embassy confirmed Sharafi's release, but said he did not know who was responsible for freeing him: "He was kidnapped and I don't have further details," said the official, who was not authorized to speak to the media and commented only on condition of anonymity.

The developments come amid signs that Britain and Iran were seeking to resolve the dispute over the seized British crew.

Iran maintains the British sailors had encroached on Iranian territory and that it had no intention of offering to swap them for Iranians held in Iraq. Britain insists its service members were in Iraqi waters and has demanded their unconditional release.

The chief Iranian negotiator, Ali Larijani, told Britain's Channel 4 news Monday through an interpreter that Iranian officials "definitely believe that this issue can be resolved and there is no need for any trial."

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