Hafez was quoted by the Saudi online newspaper Sabq.org as saying that Saudi bank customers’ financial information was safe and there was “no need for customers to be concerned” because Saudi banks’ information networks were very secure.

Hafez also said officials had received no reports from Saudis about their data being breached.

The dueling reports underscored the hostile relationship between Saudi Arabia and Israel. Saudi Arabia does not recognize Israel’s statehood.

The hacking issue surfaced after Yediot Ahronot’s online edition, YNet, reported that hackers — identifying themselves as Group XP, claimed to have gained access to 400,000 Israeli credit card accounts in what was described as “a gift to the world for the New Year.”

Days later, a hacker claiming to be a 19-year-old Saudi national, using the pseudonym OxOmar, posted online the credit card details and personal information of 6,000 thousand Israelis and said he had access to tens of thousands of other accounts. He said the “Zionist lobby” was behind covering up the size of the initial leak.

Israeli officials said about 21,000 active credit card accounts in all were compromised. Banks said the cards were canceled and new ones issued.

It was not possible to independently verify the claims by the hackers.

In apparent retribution for the cyber attacks, YNet reported that Israeli hackers inside and outside the country had obtained the records of thousands of credit cards used in Saudi shopping web sites. One of the hackers, who was not identified, told the newspaper they would disclose the material if “the leaks continue.”

YNet said it reviewed the information and can “confirm that at least some of the names on the list are real and match the rest of the details presented in the hacker’ list.” The website said it verified some of the information through Facebook pages and email accounts.

Over the weekend, Israeli Deputy Foreign Minister Danny Ayalon described the cyber-attacks as terrorism and warned that Israel would “retaliate forcefully.”

On Monday, he found his own website had been attacked.

“Cyberspace appears to be the new battlefield, and our opponents will not be able to defeat us on this plain, either,” Ayalon said Monday.

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Associated Press writers Abdullah Al-Shihri in Riyadh, Saudi Arabia, and Amy Teibel in Jerusalem contributed.

The pressure on the riyal has become the latest economic blow to the country’s economy, which is under several rounds of U.S., United Nations and European Union sanctions because of its controversial nuclear program. Critics have argued that President Mahmoud Ahmadinejad’s stewardship of the economy has brought few gains.

The decline in the currency’s value “is not related to the sanctions,” Foreign Ministry spokesman Ramin Mehmanparast, arguing that the sanctions had yet to take effect. “For the time being, it has nothing to do with foreign policy.”

The semiofficial Mehr news agency reported Monday that the Central Bank was planning on holding a meeting of experts to discuss the volatility in the currency markets. The meeting was slated for Wednesday.

The latest sanctions signed by Obama include an amendment barring foreign financial institutions that do business with Iran’s Central Bank from opening or maintaining correspondent operations in the United States. The Obama administration, however, is looking to soften the impact of the measure, fearing they could lead to a spike in global crude oil prices or pressure key allies that import Iranian oil.

The measures add new pressure to a hardline government that has already come under tremendous pressure from the U.S. and its allies over a nuclear program the West maintains is aimed at developing weapons. Iran says its program is purely peaceful.

The standoff prompted threats last week by Iran to shutter the Strait of Hormuz, a waterway through which a sixth of the world’s oil moves to market.

While few believe that Iran would actually take the step, the warnings appear to reflect Iranian officials’ unease with the sanctions regime and the effect they are having on the country. Iran relies on oil exports for about 80 percent of its annual foreign revenue, and sanctions targeting its oil, or even a unilateral move by Tehran to withhold its crude from the market ,would deprive government coffers of sorely-needed cash.

Amid the international political tussle, the economic situation in the country grows increasingly less palatable for Iranians.

The official inflation rate remains at more than 19 percent, while analysts argue it is significantly higher than that level. Subsidy cuts on food and energy that were pushed through Parliament last year by Ahmadinejad are very unpopular, and economists warned long before they were enacted that they could further stoke inflation. Since the cuts were implemented, food and energy prices have spiked.

While Iranian economists, for now, argue that the latest sanctions may not be directly influencing the currency, the new measures add to already existing angst in the country.

Banking analyst Farid Ziaolmaleki, in comments echoed by others, believes that more Iranians are turning to the currency speculation, buying up dollars, as inflation has outpaced the 12 to 15 percent interest rates offered by banks.

Compounding the pressure on the riyal that such speculation could have, merchants have also taken to calculating the price of their wares in dollars, hoping for a steeper depreciation in the Iranian currency.

Economic daily Donya-e-Eqtesad wrote in its Tuesday edition that “a big portion of merchants are not willing to sell their wares, and prefer to hold onto them until” the dollar strengthens more against the riyal.

Another daily newspaper, Shargh, said that housing prices had increased by 25 percent in recent weeks because of the weakening in the value of the riyal.

Even as Iranian officials argue the current currency pressure have little to do with the latest sanctions, other note that the threat last week to choke off the Strait of Hormuz was a factor.

The warnings “cause reactions, and this was reflected on the currency,” said Vahid Mahmoudi, a Tehran University professor of management.

___

El-Tablawy reported from Cairo.

The pressure on the currency has become the latest economic blow to the country’s economy, which is under several rounds of U.S., United Nations and European Union sanctions because of its controversial nuclear program. Critics have argued that President Mahmoud Ahmadinejad’s stewardship of the economy has brought few gains.

The decline in the currency’s value “is not related to the sanctions,” Foreign Ministry spokesman Ramin Mehmanparast, arguing that the sanctions had yet to take effect. “For the time being, it has nothing to do with foreign policy.”

The semiofficial Mehr news agency reported Monday that the Central Bank was planning on holding a meeting of experts to discuss the volatility in the currency markets. The meeting was slated for Wednesday. On Tuesday, the riyal had regained some strength and was trading at about 17,000 riyals to the dollar.

The latest sanctions signed by Obama include an amendment barring foreign financial institutions that do business with Iran’s Central Bank from opening or maintaining correspondent operations in the United States. The Obama administration, however, is looking to soften the impact of the measure, fearing they could lead to a spike in global crude oil prices or pressure key allies that import Iranian oil.

The measures add new pressure to a hardline government that has already come under tremendous pressure from the U.S. and its allies over a nuclear program the West maintains is aimed at developing weapons. Iran says its program is purely peaceful.

The standoff prompted threats last week by Iran to shutter the Strait of Hormuz, a waterway through which a sixth of the world’s oil moves to market.

While few believe that Iran would actually take the step, the warnings appear to reflect Iranian officials’ unease with the sanctions regime and the effect they are having on the country. Iran relies on oil exports for about 80 percent of its annual foreign revenue, and sanctions targeting its oil, or even a unilateral move by Tehran to withhold its crude from the market ,would deprive government coffers of sorely-needed cash.

Amid the international political tussle, the economic situation in the country grows increasingly less palatable for Iranians.

The official inflation rate remains at more than 19 percent, while analysts argue it is significantly higher than that level. Subsidy cuts on food and energy that were pushed through Parliament last year by Ahmadinejad are very unpopular, and economists warned long before they were enacted that they could further stoke inflation. Since the cuts were implemented, food and energy prices have spiked.

While Iranian economists, for now, argue that the latest sanctions may not be directly influencing the currency, the new measures add to already existing angst in the country.

Banking analyst Farid Ziaolmaleki, in comments echoed by others, believes that more Iranians are turning to the currency speculation, buying up dollars, as inflation has outpaced the 12 to 15 percent interest rates offered by banks.

Compounding the pressure on the riyal that such speculation could have, merchants have also taken to calculating the price of their wares in dollars, hoping for a steeper depreciation in the Iranian currency.

Economic daily Donya-e-Eqtesad wrote in its Tuesday edition that “a big portion of merchants are not willing to sell their wares, and prefer to hold onto them until” the dollar strengthens more against the riyal.

Another daily newspaper, Shargh, said that housing prices had increased by 25 percent in recent weeks because of the weakening in the value of the riyal.

Even as Iranian officials argue the current currency pressure have little to do with the latest sanctions, other note that the threat last week to choke off the Strait of Hormuz was a factor.

The warnings “cause reactions, and this was reflected on the currency,” said Vahid Mahmoudi, a Tehran University professor of management.

___

El-Tablawy reported from Cairo.

The pressure on the currency has become the latest economic blow to the country’s economy, which is under several rounds of U.S., United Nations and European Union sanctions because of its controversial nuclear program. Critics have argued that President Mahmoud Ahmadinejad’s stewardship of the economy has brought few gains.

The decline in the currency’s value “is not related to the sanctions,” Foreign Ministry spokesman Ramin Mehmanparast, arguing that the sanctions had yet to take effect. “For the time being, it has nothing to do with foreign policy.”

The semiofficial Mehr news agency reported Monday that the Central Bank was planning on holding a meeting of experts to discuss the volatility in the currency markets. The meeting was slated for Wednesday. On Tuesday, the riyal had regained some strength and was trading at about 17,000 riyals to the dollar.

The latest sanctions signed by Obama include an amendment barring foreign financial institutions that do business with Iran’s Central Bank from opening or maintaining correspondent operations in the United States. The Obama administration, however, is looking to soften the impact of the measure, fearing they could lead to a spike in global crude oil prices or pressure key allies that import Iranian oil.

The measures add new pressure to a hardline government that has already come under tremendous pressure from the U.S. and its allies over a nuclear program the West maintains is aimed at developing weapons. Iran says its program is purely peaceful.

The standoff prompted threats last week by Iran to shutter the Strait of Hormuz, a waterway through which a sixth of the world’s oil moves to market.

While few believe that Iran would actually take the step, the warnings appear to reflect Iranian officials’ unease with the sanctions regime and the effect they are having on the country. Iran relies on oil exports for about 80 percent of its annual foreign revenue, and sanctions targeting its oil, or even a unilateral move by Tehran to withhold its crude from the market ,would deprive government coffers of sorely-needed cash.

Amid the international political tussle, the economic situation in the country grows increasingly less palatable for Iranians.

The official inflation rate remains at more than 19 percent, while analysts argue it is significantly higher than that level. Subsidy cuts on food and energy that were pushed through Parliament last year by Ahmadinejad are very unpopular, and economists warned long before they were enacted that they could further stoke inflation. Since the cuts were implemented, food and energy prices have spiked.

While Iranian economists, for now, argue that the latest sanctions may not be directly influencing the currency, the new measures add to already existing angst in the country.

Banking analyst Farid Ziaolmaleki, in comments echoed by others, believes that more Iranians are turning to the currency speculation, buying up dollars, as inflation has outpaced the 12 to 15 percent interest rates offered by banks.

Compounding the pressure on the riyal that such speculation could have, merchants have also taken to calculating the price of their wares in dollars, hoping for a steeper depreciation in the Iranian currency.

Economic daily Donya-e-Eqtesad wrote in its Tuesday edition that “a big portion of merchants are not willing to sell their wares, and prefer to hold onto them until” the dollar strengthens more against the riyal.

Another daily newspaper, Shargh, said that housing prices had increased by 25 percent in recent weeks because of the weakening in the value of the riyal.

Even as Iranian officials argue the current currency pressure have little to do with the latest sanctions, other note that the threat last week to choke off the Strait of Hormuz was a factor.

The warnings “cause reactions, and this was reflected on the currency,” said Vahid Mahmoudi, a Tehran University professor of management.

___

El-Tablawy reported from Cairo.

Iran’s navy chief said Wednesday that it would be “very easy” for his country’s forces to close the strategic Strait of Hormuz, the passage at the mouth of the Persian Gulf through which about 15 million barrels of oil pass daily. It was the second such warning by Iran in two days, reflecting Tehran’s concern that the West is about to impose new sanctions that could hit the country’s biggest source of revenue, oil.

“Iran has comprehensive control over the strategic waterway,” Adm. Habibollah Sayyari told state-run Press TV, as the country was in the midst of a 10-day military drill near the strategic waterway.

The comments drew a quick response from the U.S.

“This is not just an important issue for security and stability in the region, but is an economic lifeline for countries in the Gulf, to include Iran,” Pentagon press secretary George Little said. “Interference with the transit or passage of vessels through the Strait of Hormuz will not be tolerated.”

Separately, Bahrain-based U.S. Navy 5th Fleet spokeswoman Lt. Rebecca Rebarich said the Navy is “always ready to counter malevolent actions to ensure freedom of navigation.”

Rebarich declined to say whether the U.S. force had adjusted its presence or readiness in the Gulf in response to Iran’s comments, but said the Navy “maintains a robust presence in the region to deter or counter destabilizing activities, while safeguarding the region’s vital links to the international community.”

Iran’s threat to seal off the Gulf, surrounded by oil-rich Gulf states, reflect its concerns over the prospect that the Obama administration will impose sanctions over its nuclear program that would severely hit its biggest revenue source. Iran is the world’s fourth-largest oil producer, pumping about 4 million barrels a day.

Gulf Arab nations appeared ready to at least ease market tensions. A senior Saudi Arabian oil official told The Associated Press that Gulf Arab nations are ready to step in to offset any potential loss of exports from Iran. The official spoke on condition of anonymity because he was not authorized to comment on the issue.

Saudi Arabia, which has been producing about 10 million barrels per day, has an overall production capacity of over 12 million barrels per day and is widely seen as the only OPEC member with sufficient spare capacity to offset major shortages.

What remains unclear is what routes the Gulf nations could take to move the oil to markets if Iran goes through with its threat.

About 15 million barrels per day pass through the Hormuz Strait, according to the U.S. Energy Information Administration.

There are some pipelines that could be tapped, but Gulf oil leaders, who met in Cairo on Dec. 24, declined to say whether they had discussed alternate routes or what they may be.

The Saudi official’s comment, however, appeared to allay some concerns. The U.S. benchmark crude futures contract fell $1.98 by the close of trading Wednesday on the New York Mercantile Exchange, but still hovered just below $100 per barrel.

U.S. State Department spokesman Mark Toner played down the Iranian threats as “rhetoric,” saying, “we’ve seen these kinds of comments before.”

While the Obama administration has warned Iran that it would not tolerate attempts to disrupt traffic through the Strait of Hormuz, U.S. officials do not see any indication that the situation will come to that. Nor do they believe that Iran, which is already under increasing pressure from sanctions, would risk disrupting the Strait because doing so would further damage Iran’s own economy.

Instead, the administration believes Iran is playing the only card it has left: issuing threats and attempting to shift focus away from its own behavior.

U.S. officials have not said whether there is a concrete response plan in place should Iran seek to block the Strait. But the administration has long said it is comfortable with the U.S. Naval presence in the region, indicating that the U.S. could respond rapidly if needed.

The White House has been largely silent on Iran’s threat, underscoring the administration’s belief that responding at the White House level would only encourage Iran.

While many analysts believe that Iran’s warnings are little more than posturing, they still highlight both the delicate nature of the oil market, which moves as much on rhetoric as supply and demand fundamentals.

Iran relies on crude sales for about 80 percent of its public revenues, and sanctions or even a pre-emptive measure by Tehran to withhold its crude from the market would already batter its flailing economy.

IHS Global Insight analyst Richard Cochrane said in a report Wednesday that markets are “jittery over the possibility” of Iran’s blockading the strait. But “such action would also damage Iran’s economy, and risk retaliation from the U.S. and allies that could further escalate instability in the region.”

“Accordingly, it is not likely to be a decision that the Iranian leadership will take lightly,” he said.

Earlier sanctions targeting the oil and financial sector added new pressures to the country’s already struggling economy. Government cuts in subsidies on key goods like food and energy have angered Iranians, stoking inflation while the country’s currency steadily depreciates.

The impetus behind the subsidies cut plan, pushed through parliament by Iranian President Mahmoud Ahmadinejad, was to reduce budget costs and would pass money directly to the poor. But critics have pointed to it as another in a series of bad policy moves by the hardline president.

So far, Western nations have been unable to agree on sanctions targeting oil exports, even as they argue that Iran is trying to develop a nuclear weapon. Tehran maintains its nuclear program — already the subject of several rounds of sanctions — is purely peaceful.

The U.S. Congress has passed a bill that penalizes foreign firms that do business with the Iran Central Bank, a move that would heavily hurt Iran’s ability to export crude. European and Asian nations use the bank for transactions to import Iranian oil.

President Barack Obama has said he will sign the bill despite his misgivings. China and Russia have opposed such measures.

Sanctions specifically targeting Iran’s oil exports would likely temporarily spike oil prices to levels that could weigh heavily on the world economy.

Closing the Strait of Hormuz would hit even harder. Energy consultant and trader The Schork Group estimated crude would jump to above $140 per barrel. Conservatives in Iran claim global oil prices will jump to $250 a barrel should the waterway be closed.

By closing the strait, Iran may aim to send the message that its pain from sanctions will also be felt by others. But it has equally compelling reasons not to try.

The move would put the country’s hardline regime straight in the cross-hairs of the world, including nations that have so far been relative allies. Much of Iran’s crude goes to Europe and to Asia.

“Shutting down the strait … is the last bullet that Iran has and therefore we have to express some doubt that they would do this and at the same time lose their support from China and Russia,” said analyst Olivier Jakob of Petromatrix in Switzerland.

Iran has adopted an aggressive military posture in recent months in response to increasing threats from the U.S. and Israel of possible military action to stop Iran’s nuclear program.

The Iranian navy’s exercises, which began on Saturday, involve submarines, missile drills, torpedoes and drones. A senior Iranian commander said Wednesday that the country’s navy is also planning to test advanced missiles and “smart” torpedoes during the maneuvers.

The war games cover a 1,250-mile (2,000-kilometer) stretch off the Strait of Hormuz, northern parts of the Indian Ocean and into the Gulf of Aden near the entrance to the Red Sea and could bring Iranian ships into proximity with U.S. Navy vessels in the area.

The moderate news website, irdiplomacy.ir, says the show of strength is intended to send a message to the West that Iran is capable of sealing off the waterway.

“The war games … are a warning to the West that should oil and central bank sanctions be stepped up, (Iran) is able to cut the lifeblood of the West and Arabs,” it said, adding that the West “should regard the maneuvers as a direct message.”

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El-Tablawy reported from Cairo. Associated Press writers Adam Schreck in Dubai, Julie Pace in Honolulu, Hawaii, and Abdullah Shihri in Riyadh, Saudi Arabia, contributed.