Oxidation of propane with oxygen, nitrous oxide or oxygen together with nitrous oxide over ZSM-5 zeolites with low concentration of iron (30-1200 ppm) treated at various conditions was studied at 450 degreesC. The highest conversion of propane (51.7%) and selectivity to propene (39.7%) and to the sum of aromatics and oxygenates (11.5%, mainly C1-C3 alcohols) was achieved if a mixture of oxygen with nitrous oxide was used as oxidant over the steamed FeH-ZSM-5. Based on the ESR results this activity was ascribed to extra-framework Fe-oxo complexes generated by hydrolysis of framework Si-O-Fe bonds followed by extraction of iron to extra-framework positions. (C) 2004 Elsevier B.V. All rights reserved.