"I announce that the great Iranian nation and the government of the Islamic republic -- while insisting on our power and rights to try [in court] these military personal -- have pardoned these 15 people and we offer their freedom as a gift to the British people in emulation of the Great Prophet of Islam," he said.
While Ahmadinejad portrayed the release of the 14 men and one woman as a gift and a goodwill gesture, there has been a lot of speculation about other motives behind the move.
"From the time Britain changed its tone and talked to Iran with more respect, things started to move quickly," a Tehran-based analyst told RFE/RL.
British Prime Minister Tony Blair said no deal was made in gaining the Britons' release. But at the same time he said "new and interesting lines of communication" were opened with Iran in the course of the crisis and offered the tantalizing possibility that a different relationship is possible if Tehran desires it.
How Was The Standoff Resolved?
However, many believe the release came as a result of growing pressure on Tehran. Some commentators argue that the crisis was resolved in part because of intervention by outside parties such as Iraq and Syria.
Others observers -- pointing to the almost simultaneous release of an Iranian diplomat in Iraq and the reported access by Iranian officials to five Iranians seized by U.S. forces in the northern Iraqi city of Irbil in January -- say a deal was brokered.
Iranian diplomat Jalal Sharafi (left) returning to Tehran from Iraq on April 3 (AFP)
But the U.S. and British governments have said there is no connection between the status of the Iranians held in Iraq and the release of the British service members.
Rosemary Hollis, director of research at London's Chatham House, doesn't believe any deal was made between Britain and Iran. But she says the British captives were released following "critical communication" between the two sides.
She tells RFE/RL the move to release the sailors suggested that Iran's leadership did not want to push the standoff too far.
"I would imagine it was a careful calculation [by the Iranians] that they had extracted some benefits from this episode but to drag it out any further could backfire on them," Hollis said.
A Crucial 'Change Of Tone'
The crisis was an opportunity for Iran to flex its muscles and to say that it cannot be bullied. At a time of increasing international pressure over its sensitive nuclear work, Tehran also signaled that it will respond to confrontation with confrontation.
Yet there is speculation that pragmatists in Iran pushed for the release of the British detainees because of the risks involved and the damage that could be caused by holding a trial for the detainees and imprisoning them long-term.
Sadegh Zibakalam, a Tehran-based professor of political science, says the decision to release the British detainees came after Britain took a softer tone on Iran and stopped making confrontational and threatening statements.
"From the time Britain changed its tone and talked to Iran with more respect, things started to move quickly," Zibakalam said. "Mr. Ahmadinejad tried to exploit the issue politically inside the country and also outside by saying 'I am the decision maker and I'm important.' At the same time, he tried to [improve] his image."
Some have characterized the episode as a major "propaganda coup" for Iran. But Iran had sought a public apology from Britain for entering what it claims were Iranian waters, which it didn't get. Instead Britain kept insisting that its personnel were unlawfully seized in Iraqi waters on a routine UN mission. Meanwhile it relied on a diplomatic approach to secure their release.
Diplomatic Victory Offers Hope For Better Relations
Following Ahmadinejad's sudden announcement that the Brits will be freed, British Prime Minister Tony Blair told reporters that his country had "taken a measured approach, firm but calm; not negotiating, but not confronting either."
Chatham House's Hollis sees the release of the British sailors and marines as a victory for diplomacy.
Ahmadinejad (left) giving state awards to the officers who detained the Britons, shortly before he announced they would be released (Fars)
"I think the Iranians have not changed the minds of anybody in the world at large," she told RFE/RL. "It has not fundamentally altered opinions about their nuclear program or their regional influence. But it could present an opportunity for the British and Iranians to try and avoid any unplanned episodes in the head waters of the Persian Gulf in the future."
In Tehran, Zibakalam argues that the diplomatic approach over the former British captives could also be applied to the crisis over Iran's sensitive nuclear work.
"The Islamic establishment of Iran showed that if you treat me [with respect], if you stop using the language of threat and instead use a civilized language, then you'll get a civilized answer as was demonstrated in this issue," he said. "In my opinion the interesting lesson that can be learned is that the West should pursue the nuclear issue with the same approach that was used in the case of the British sailors."
The EU's current German presidency issued a statement today saying it hopes "Iran uses this opportunity to find solutions to other issues in cooperation with the international community and the European Union."
"This applies in particular to the proposal by the foreign ministers of China, Germany, France, Great Britain, Russia, and the United States to resolve the controversy over Iran's nuclear program through dialogue and negotiations," the statement continued.