The United Arab Emirates suspended all trade and financial transactions with Iran on Tuesday, accusing Tehran of launching two ballistic missiles at shipping in the Gulf, a claim Iran denied.

“In light of regional escalations that undermine regional and international peace and security, all trade, commercial exchanges, and financial transactions with Iran have been halted until further notice,” head of the foreign ministry’s strategic communications department Afra Al Hameli said, according to a statement, The New Region reported.

“Hameli emphasized that the UAE remains firmly committed to safeguarding the integrity of the international financial system, in line with international law and the highest global standards,” it added.

Earlier on Tuesday, the country’s defense ministry said two ballistic missiles “originating from Iran” had targeted maritime navigation but fell into the sea, including one that allegedly landed within Emirati territorial waters.

Iran rejected the accusations later, with foreign ministry spokesperson Esmail Baghaei calling them harmful to regional trust and security efforts.

The UAE, geographically situated near the strait, has been one of Iran's main targets during its strikes on the Gulf during the renewed US-Israel war with Iran, on account of US military presence and Abu Dhabi's increasing alignment with Israel.

On Wednesday, Chief of Staff of the Iranian Armed Forces Ali Abdollahi on Tuesday warned "the countries on the southern shores of the Persian Gulf" which have pledged not to allow the US to use their territory to strike Iran that "nothing is hidden from our eyes."

"It seems unlikely that this number of military aircraft, especially refueling aircraft, would be stationed at regional bases without the knowledge of the host countries," Abdollahi said. "We warn that any assistance or facilitation to the aggressive US army is tantamount to participation with US military forces."

Iran has exerted control over the strait as a retaliatory measure amid the ongoing war with the US, hampering global energy supplies and raising the economic stakes for Washington as the conflict drags on.

Tehran is currently in negotiations with Oman to formulate a joint management system for Hormuz that will likely spell an end to free transit and impose a tolling mechanism, despite US objections.