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ANAMA (Reuters) - Iran has built up its naval forces in the Gulf and prepared boats that could be used in suicide attacks, but the U.S. Navy can prevent it from blocking the Strait of Hormuz, the commander of U.S. naval forces in the region said on Sunday.

Iran has made a series of threats in recent weeks to disrupt shipping in the Gulf or strike U.S. forces in retaliation if its oil trade is shut down by sanctions, or if its disputed nuclear program comes under attack.

"They have increased the number of submarines ... they increased the number of fast attack craft," Vice Admiral Mark Fox told reporters. "Some of the small boats have been outfitted with a large warhead that could be used as a suicide explosive device. The Iranians have a large mine inventory."

"We have watched with interest their development of long range rockets and short, medium and long range ballistic missiles and of course ... the development of their nuclear program," Fox, who heads the U.S. Fifth Fleet, said at a briefing on the fleet's base in the Gulf state of Bahrain.

Iran now has 10 small submarines, he said.

Military experts say the U.S. Navy's Fifth Fleet patrolling the Gulf - which always has at least one giant supercarrier accompanied by scores of jets and a fleet of frigates and destroyers - is overwhelmingly more powerful than Iran's navy.

But ever since al Qaeda suicide bombers in a small boat killed 17 sailors on board the destroyer U.S.S. Cole in a port in Yemen in 2000, Washington has been wary of the vulnerability of its huge battleships to bomb attacks by small enemy craft.

Asked whether the U.S. Navy was prepared for an attack or other trouble in the Gulf, Fox said: "We are very vigilant, we have built a wide range of options to give the president and we are ready... What if it happened tonight? We are ready today."

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