Iran (search) on Thursday warned of a fast, crushing response to any attack on its nuclear facilities and said an explosion heard in the south a day earlier that sparked fears of foreign military activity was the result of construction work.

Wednesday's explosion near the Gulf port city of Deylam, initially reported by a wing of state-run television to be a missile strike or anti-aircraft fire, was said on Thursday to have been from construction work on a dam. Other previous explanations included friendly fire from military exercises and a fuel tank that was dropped from a plane.

Defense Minister Ali Shamkhani (search) was quoted by state-run radio Thursday as saying that the explosion was not an attack, but that any hostile action would result in Iranian military action.

"Any time the Iranian nation watches our crushing response to the enemy, they should know that one of our nuclear or non-nuclear facilities has been attacked," he was quoted as saying.

Shamkhani added that "any aggression" against Iranian facilities would "meet a swift reaction."

Iran said the explosion, near the southwestern port city of Deylam, about 110 miles from the Bushehr nuclear facility, was the result of construction work.

"The sound of Wednesday's explosion was due to road building operations in the mountainous region of Deylam for the Kowsar Dam," Deputy Interior Minister for Security Affairs Ali Asghar Ahmadi said Thursday.

On Wednesday a a top security official of the Supreme National Security Council, Ali Agha Mohammadi, gave a similar account.

The explosion prompted fears of a missile attack, and though U.S. and Israeli officials denied any involvement with the blast, it spiked oil prices and showed unease about the international confrontation over Iran's nuclear program.

The United States accuses Iran of having a secret program to make nuclear weapons. Iran insists its nuclear activities are for peaceful energy purposes.

Israel has warned that it may consider a pre-emptive strike against Iranian nuclear installations along the lines of its 1981 bombing of an unfinished Iraqi nuclear reactor near Baghdad.

Secretary of State Condoleezza Rice has said a military strike against Iran was "not on the agenda at this point," but President Bush has said his administration wouldn't take any option off the table.

On Wednesday, Iran's Intelligence Minister Ali Yunesi publicly confirmed for the first time that the United States has been flying surveillance drones over Iran's airspace to spy on its nuclear and military facilities.

"Most of the shining objects that our people see in Iran's airspace are American spying equipment used to spy on Iran's nuclear and military facilities," the minister told reporters.

His remarks confirmed a Sunday report in The Washington Post that quoted unidentified U.S. officials as saying the drones have been flying over Iran for nearly a year to seek evidence of nuclear weapons programs.

"These activities won't reveal anything to them," Yunesi said of the Americans. "Our nuclear activities are open and very transparent. Our military activities are all legal."

In December, the Iranian air force was ordered to shoot down any unknown flying objects. At the time, there were reports in Iranian newspapers that Iran had discovered spying devices in the pilotless planes that its air defense force had shot down.

"If any of the bright objects come close, they will definitely meet our fire and will be shot down. We possess the necessary equipment to confront them," Yunesi said.