Iran has urged regional rival Saudi Arabia to free three Iranian fishermen, pay compensation for shooting dead a sailor and punish those behind an "irresponsible act", Fars news agency reported on Thursday.

Iranian media reported last week that Saudi border guards had opened fire on Iranian fishing boats in the Gulf, killing a fisherman.

The Saudi Information Ministry said three of its elite Islamic Revolutionary Guard Corps members had been arrested aboard an explosive-laden boat near an oil platform in the Gulf.

"It is clear this was intended to be a terrorist act in Saudi territorial waters designed to cause severe damage to people and property," the ministry said in a statement on Monday.

Iran denied the Saudi claim, saying the three were fishermen and were not arrested aboard an explosive-laden boat as claimed by Riyadh.

"The fishermen were not armed ... Saudi guards killed one of the sailors by opening fire on the boats," the semi-official news agency said, quoting a statement published by Iran's Interior Ministry on Thursday.

"Those detained fishermen should be freed ... compensation should be paid for the one killed and those involved in the irresponsible act should be punished."

READ MORE: Iran denies Saudi claim of Revolutionary Guards' arrest

The Iranian interior ministry statement also said the three fishing boats had legal documents and departed Iran's southern port of Bushehr for fishing but lost their way.

"Shooting at fishing boats is against the humanitarian and Islamic norms," it said.

"One group of the fishermen could steer their boat back onto the main course, but the two other boats were driven towards the shared sea borders with Saudi Arabia, unaware of their situation or unable to control the vessels," it said.

Shia-dominated Iran and Sunni Saudi Arabia accuse each other of fomenting tension in the Middle East, where the two arch rivals back opposite sides in conflicts in Syria, Yemen and Iraq.

Source: News agencies