Iran's military has shot down a US reconnaissance drone aircraft in eastern Iran and has threatened to respond to the violation of Iranian airspace, a military source told state television on Sunday.

"Iran's military has downed an intruding RQ-170 American drone in eastern Iran," Iran's Arabic-language Al Alam state television network quoted the unnamed source as saying.

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"The spy drone, which has been downed with little damage, was seized by the Iranian armed forces."

Iran shot down the drone at a time when it is trying to contain foreign reaction to the storming of the British embassy in Tehran on Tuesday, shortly after London announced that it would impose sanctions on Iran's central bank in connection with Iran's controversial nuclear enrichment program.

Britain evacuated its diplomatic staff from Iran and expelled Iranian diplomats in London in retaliation, and several other EU members recalled their ambassadors from Tehran.

The attack dragged Iran's relations with Europe to a long-time low.

"The Iranian military's response to the American spy drone's violation of our airspace will not be limited to Iran's borders," the military source said, without elaborating.

The United States and Israel have not ruled out military action against Iran's nuclear facilities if diplomacy fails to resolve the nuclear dispute.

Iran has dismissed reports of possible US or Israeli plans to strike Iran, warning that it would respond to any such assault by attacking US interests in the Gulf and Israel.

Analysts say Tehran could retaliate by launching hit-and-run strikes in the Gulf and by closing the Strait of Hormuz. About 40 percent of all traded oil leaves the Gulf region through the strategic waterway.

Iran said in July it had shot down an unmanned US spy plane over the holy city of Qom, near its Fordu nuclear site.

In related news, Hezbollah-affiliated Lebanese website al-Intiqad on Sunday posted what they claim to be pictures of Israeli spy devices that IAF aircraft destroyed on Friday after they had been discovered in southern Lebanon.

Two people were injured Friday during an explosion in the southern Lebanese towns of Srifa and Deir Kifa, Lebanese newspaper The Daily Star reported.

The report suggested that the explosion may have been caused by an IDF drone, but also speculated that it was a result of a cluster bomb.

Jerusalem has alleged that Iran has heavily armed Hezbollah by transferring weapons through Syria.

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