LAGOS, March 22 (Reuters) - A rebel group from Nigeria's oil-producing Niger Delta said on Saturday it was behind an explosion at a naval base which killed at least two sailors, but military officials denied the claim.

Fire tore through a naval jetty in the Delta early on Friday, destroying two gunboats, a speedboat and a barge. The authorities said two sailors were killed although one security source said four dead bodies had been retrieved from the water.

The Movement for the Emancipation of the Niger Delta (MEND), a militant group which has carried out a series of attacks on the oil industry, said it was retaliating for the death of civilians in an accident involving a navy vessel.

"We carried out that sabotage in retaliation for the incident in Bayelsa when a naval gunboat ran into a passenger boat killing 16 persons," MEND said in an email to Reuters.

"The navy did not deem it fit to make a public apology or pay compensation to the victims' families. It was a display of arrogance on their part and we made them pay for it."

Military officials denied MEND's involvement in the blaze and repeated earlier statements that it had been triggered by an electrical fault.

"It was an accident. The fire started from an electric fuel line as the boats were about to cast off," said Olabisi Wey, navy spokesman at the Pathfinder jetty where the fire occurred.

"It was not through a MEND attack or any militant group."

The Delta is home to the world's eighth biggest oil industry, exporting around 2.1 million barrels per day, but oil companies have been struggling to cope with a wave of violence in the vast wetlands region.

As part of a campaign to demand greater local control over oil revenues, MEND launched attacks in early 2006 which shut a fifth of Nigerian output and pushed up global oil prices.

A new government led by President Umaru Yar'Adua and Vice-President Goodluck Jonathan has held peace talks but a key negotiator warned this month of a risk of renewed violence because rebels were frustrated by a lack of concrete progress. (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ ) (Reporting by Nick Tattersall and Austin Ekeinde; Editing by Robert Woodward)

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