Beckett's announcement came shortly after the Defense Ministry released evidence it said showed the sailors and Royal Marines were operating in Iraqi waters when they were captured on March 23.
It also came as the United States Navy began the largest maneuvers in the Persian Gulf since the 2003 invasion of Iraq.
"We are now in a new phase of diplomatic activity," Beckett told Parliament, adding that London wanted to focus all of its "bilateral efforts during this phase" toward freeing the sailors and marines.
"We will therefore be imposing a freeze on all other official, bilateral business with Iran till this situation is resolved. We will keep other aspects of our policy towards Iran under close review and continue to proceed carefully," she said.
Tehran has announced that the British sailors and marines it captured on March 23 might be put on trial.
Britain Denies Ship in Iranian Waters
Royal Navy Vice Admiral Charles Style, deputy chief of the British defense staff, denied today that the sailors and marines on the "HMS Cornwall" violated Iran’s territorial waters.
"My primary message is clear: 'HMS Cornwall' with her boarding party was about her legal business, in Iraqi territorial waters, under a United Nations Security Council resolution and with the explicit approval of the Iraqi government," Style said. "The action by Iranian forces in arresting and detaining our people is unjustified and wrong. As such it is a matter of deep concern to us," Style added.
The British Ministry of Defense has released satellite data supporting the statement.
Earlier today, Prime Minister Tony Blair told lawmakers it was time to increase diplomatic pressure on Iran over the incident -- which Iran says took place in Iranian waters.
Iran's Embassy in London said the British and Iranian governments were capable of resolving the incident.
(Reuters, AP, AFP)