British Sailors Were in Iraq Waters

And the Iranians themselves offer proof. Story from Yahoo/AP:

Britain said it was freezing talks on all other issues with Iran until it freed 15 Royal Navy crew members seized last week, and the British military released what it said was proof its boats were within Iraqi territorial waters when they were seized...

Britain's military said its vessels were 1.7 nautical miles inside Iraqi waters when Iran seized the sailors and marines on Friday.
Vice Adm. Charles Style told reporters that the Iranians had provided a position on Sunday — a location that he said was in Iraqi waters. By Tuesday, Iranian officials had given a revised position 2 miles east, placing the British inside Iranian waters — a claim he said was not verified by global positioning system coordinates.

"It is hard to understand a legitimate reason for this change of coordinates," Style said.

Not hard for me to grasp, because the change in coordinates suited the mullahs' rhetoric.