British officers took part in a US war game aimed at preparing for a possible invasion of Iran, despite repeated claims by the foreign secretary, Jack Straw, that a military strike against Iran is inconceivable.

The war game, codenamed Hotspur 2004, took place at the US base of Fort Belvoir in Virginia in July 2004.

A Ministry of Defence spokesman played down its significance yesterday. "These paper-based exercises are designed to test officers to the limit in fictitious scenarios. We use invented countries and situations using real maps," he said.

The disclosure of Britain's participation came in the week in which the Iranian crisis intensified, with a US report that the White House was contemplating a tactical nuclear strike and Tehran defying the United Nations security council.

Mahmoud Ahmadinejad, the Iranian president, who sparked outrage in the US, Europe and Israel last year by calling for Israel to be wiped off the face of the Earth, created more alarm yesterday. He told a conference in Tehran in support of the Palestinians: "Like it or not, the Zionist regime is heading toward annihilation. The Zionist regime is a rotten, dried tree that will be eliminated by one storm."

The senior British officers took part in the Iranian war game just over a year after the invasion of Iraq. It was focused on the Caspian Sea, with an invasion date of 2015. Although the planners said the game was based on a fictitious Middle East country called Korona, the border corresponded exactly with Iran's and the characteristics of the enemy were Iranian.

A British medium-weight brigade operated as part of a US-led force.

The MoD's Defence Science and Technology Laboratory, which helped run the war game, described it on its website as the "year's main analytical event of the UK-US Future Land Operations Interoperability Study" aimed at ensuring that both armies work well together. The study "was extremely well received on both sides of the Atlantic".

According to an MoD source, war games covering a variety of scenarios are conducted regularly by senior British officers in the UK, the US or at Nato headquarters. He cited senior military staff carrying out a mock invasion of southern England last week and one of Scotland in January.

However, Hotspur took place at a time of accelerated US planning after the fall of Baghdad for a possible conflict with Iran. That planning is being carried out by US Central Command, responsible for the Middle East and central Asia area of operations, and by Strategic Command, which carries out long-range bombing and nuclear operations.

William Arkin, a former army intelligence officer who first reported on the contingency planning for a possible nuclear strike against Iran in his military column for the Washington Post online, said: "The United States military is really, really getting ready, building war plans and options, studying maps, shifting its thinking."

A Foreign Office spokesman said: "The foreign secretary has made his position very clear that military action is inconceivable. The Foreign Office regards speculation about war, particularly involving Britain, as unhelpful at a time when the diplomatic route is still being pursued."

After the failure of a mission to Tehran on Thursday by Mohammed ElBaradei, the head of the International Atomic Energy Agency, Russia announced a diplomatic initiative yesterday. It is to host a new round of talks in Moscow on Tuesday with the US, the EU and China.