Afra Al Hameli, Director of the Strategic Communications Department at the UAE Ministry of Foreign Affairs, said in a statement that the decision was taken in response to the escalating regional tensions.

"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," Al Hameli said.

The announcement came just hours after the UAE issued its first major missile threat warning in months, urging residents to remain in safe locations after the country's air defence systems detected a potential missile threat targeting the UAE.

The National Emergency Crisis and Disaster Management Authority (NCEMA) said in a post on X that residents should remain vigilant and follow instructions issued through official channels.

"UAE air defence systems detected a missile threat targeting the country. Please remain in a safe location and follow warnings and updates issued through official channels," NCEMA said.

UAE Interior Ministry issues separate alert

The UAE Interior Ministry also issued a separate warning, citing the "current situation" and "potential missile threats".

Residents were advised to move to the nearest secure building and remain in a safe location until further instructions.

The alerts come amid heightened tensions in the Middle East, a day after a Memorandum of Understanding between Iran and the United States, aimed at ending the fighting in the region, expired on Monday.

UAE's previous missile warning came in May

The latest alert marks the first major missile threat warning issued by the UAE in several months.

The country's previous such warning was issued in May.