DISASTER IRAN FLIGHT 655

Iran Air Flight 655 is an Iran Air civilian passenger flight from Tehran to Dubai. On 3 July 1988, the aircraft operating this route was shot down by the United States Navy guided missile cruiser USS Vincennes. The incident took place in Iranian airspace, over Iran's territorial waters in the Persian Gulf, and on the flight's usual flight path. The aircraft, an Airbus A300 B2-203, was destroyed by SM-2MR surface-to-air missiles fired from the Vincennes.

All 290 on board, including 66 children and 16 crew, died. This event ranks seventh among the deadliest disasters in aviation history, 10th if including the 9/11 attacks, which include ground casualties; the incident retains the highest death toll of any aviation incident in the Persian Gulf. The Vincennes had entered Iranian territorial waters after one of its helicopters drew warning fire from Iranian speedboats operating within Iranian territorial limits.
According to the Iranian government, Vincennes negligently shot down the civilian aircraft: the airliner was making IFF squawks in Mode III (not Mode II used by Iranian military planes), a signal that identified it as a civilian craft.

According to the United States government, the crew incorrectly identified the Iranian Airbus A300 as an attacking F-14A Tomcat fighter, a plane made in the United States and operated at that time by only two forces worldwide, the United States Navy and the Islamic Republic of Iran Air Force. While the Iranian F-14s had been supplied by manufacturer Grumman in an air-to-air configuration only in the 1970s, the crew of Vincennes had been briefed when entering the region that the Iranian F-14s had an iron bomb capability as well as Maverick missile and unguided rockets for air-to-surface. The 53 page Pentagon report issued almost two months after the incident, while not directly stating the point, found that almost all of the immediate details given of the shooting-down were erroneous, yet absolved the officers and crew.

According to Noam Chomsky and others, compared to the reaction generated by the downing of Malaysia Airlines Flight 17 in 2014, the incident triggered few reactions at the time. The event generated a great deal of criticism of the United States. Some analysts blamed the captain of Vincennes for reckless and aggressive behavior in a tense and dangerous environment.
The United States government did not formally apologize to Iran. In 1996, the United States and Iran reached a settlement at the International Court of Justice which included the statement "...the United States recognized the aerial incident of 3 July 1988 as a terrible human tragedy and expressed deep regret over the loss of lives caused by the incident...". As part of the settlement, the United States did not admit legal liability but agreed to pay on an ex gratia basis US$61.8 million, amounting to $213,103.45 per passenger, in compensation to the families of the Iranian victims.
Iran Air still uses flight number IR655 on the Tehran to Dubai route as a memorial to the victims.

http://en.wikipedia.org/wiki/Iran_Air_Flight_655