Iran poses the most serious threat to the UAE because of its occupation of three UAE islands although the two countries have strong commercial links, according to a local study.

"Iran constitutes the greatest threat to the UAE because of its continuous occupation of the islands of Abu Musa, Greater Tunb and Lesser Tunb since 1971," said the study published by the Emirates Centre for Strategic Studies and Research.

"Iran's intentions and expansionist ambitions and its desire to demonstrate itself as the biggest military and political power in the region are also a source of permanent concern to the UAE and a cause of fear for the other Gulf states," said the study by UAE intellectual and university professor, Abdul Khalek Abdullah.

But the author noted political tensions have not affected the strong economic, trade and historical relationship between the UAE and Iran.

"The UAE and Iran have more to converge than to diverge...relations between them in various fields, especially in trade, are very cordial if not ideal," he said.

Abdullah highlighted the UAE's overtures to resolve the island issue and proposed intensified diplomacy within the GCC and the Arab world to "make Iran respond to efforts to reach a peaceful settlement".