The four men died two hours after British troops had been commemorating the dead from the two world wars and all subsequent conflicts at a Remembrance Sunday service in Basra. The attack was one of the worst incidents of enemy action in the area this year.

It was the first time since the end of the combat phase of the Iraq war that servicemen have been killed while patrolling on the Shatt al-Arab waterway, which divides Iraq and Iran. A forensic examination of the blast is expected to begin today.

Defence sources said that the military personnel had been engaged in a routine patrol of the river, travelling in two boats, looking for suspicious craft and monitoring movements along the bank from where mortar rounds have been fired in the past.

The boats approached a pontoon on the waterway on the west side when an improvised explosive device detonated, probably by remote control. Shia Islamic terrorists were suspected of carrying out the attack.

Captain Tane Dunlop, a British Army spokesman in Basra, said that the multinational force would be targeting those responsible. He said: "The first priority is to evacuate the casualties, which has been done. Also, we will be carrying out a follow-up operation to target those responsible.

"Furthermore, there will be a more considered follow-up in terms of forensics with teams of explosive ordnance experts and weapons intelligence experts who will analyse the incident in minute detail."

The explosion occurred near the Old State Building, a British military base. Last week Kingsman Jamie Hancock, aged 19, of the 2nd Battalion The Duke of Lancaster’s Regiment, was killed by machine-gun fire while he was standing sentry in a sandbagged sangar at the gate of the base.

Two years ago, eight Royal Marine commandos in three patrol boats were seized by Iranian Revolutionary Guard gunmen in an armed boat, after claiming that the servicemen had strayed into Iranian territorial waters. The commandos were ill-treated but eventually released. Their boats have never been returned.

Defence sources said that yesterday’s attack bore all the hallmarks of a Shia extremist operation. The multiple casualties indicated that the terrorists had planted a substantial explosive device.

There were other casualties in the two boats, although none of them sustained serious injuries.

The incident was the worst since May when five service personnel were killed as their Lynx helicopter was shot down in Basra.

Des Browne, the Defence Secretary, said last night: "This terrible incident reinforces in our minds the sacrifice being made by brave men and women in our Armed Forces."

He added: "Today at the Cenotaph [in Whitehall] and across the country we remembered those brave souls that have served this nation across the years. That dedication is still evident in the events today in Iraq and are a stark reminder of the perils they face."

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