Jeremy Hunt has warned there is a 'great risk' of a drift to war in the Gulf after attacks on two oil tankers.
Britain has joined the United States in blaming Iran for the attacks - a claim which Tehran has strongly denied.
Mr Hunt, the Foreign Secretary, said Britain was urging all sides in the dispute to "de-escalate" in order to avoid an armed conflict.
"This is the great risk of the situation that we are in. Both sides in this dispute think that the other side wouldn't want a war. We are urging all sides to de-escalate," he told BBC1's The Andrew Marr Show.
"Having spoke to President Trump, I am absolutely clear that for America they want this to end in negotiations.
"Let's see Iran stop its destabilising activities in Lebanon through Hezbollah, in Yemen where they are firing missiles into Saudi Arabia, on the Gulf as we have seen. That is the long-term solution."
Mr Hunt defended his assertion that Iran was "almost certain" to blame for the attacks on the tankers.
"We have done our own intelligence assessment. We have got videos of what happened. We have seen evidence. We don't believe anyone else could have done this," he said.
