The United Arab Emirates (UAE) has suspended commercial and economic relations with Iran after announcing that Tehran launched two ballistic missiles towards the Gulf state on Tuesday.

The UAE Ministry of Defence stated that air defence systems detected two ballistic missiles launched from Iran towards its territory.

The incident is considered Tehran’s first direct attack targeting the Gulf country since May.

The event prompted emergency telephone alerts to be sent to residents across the UAE.

The Ministry of Defence stated that assessments indicated the missiles targeted maritime traffic, adding that one missile fell into the sea outside UAE territorial waters and the other landed within territorial waters.

The UAE Ministry of Foreign Affairs later announced that “in light of regional tensions that undermine regional and international peace and security, all trade, commercial relations, and financial transactions with Iran have been halted until further notice.”

Iran denied any involvement in the missile attacks. Iranian Foreign Ministry Spokesperson Esmail Baghaei said the claim “contradicts the principle of good neighbourliness and undermines ongoing efforts to strengthen trust among regional countries.”

The missile strikes occurred after a period in which the UAE and Tehran had sought to reduce tensions between the two countries.

The bulk of Tehran’s military retaliation targeted neighbouring Gulf states, which Iran accused of facilitating US-Israeli attacks.

The UAE bore the heaviest brunt of Iran’s attacks against US allies in the Gulf, sustaining nearly 3,000 missile and drone strikes.

Exhibiting the most hawkish stance against Tehran among its Gulf neighbours, the UAE responded with dozens of strikes against Iran.

However, tensions between the UAE and Iran eased following a memorandum of understanding signed between Washington and Tehran in June.

After the agreement began to unravel in early July, Iran largely redirected its attacks towards Bahrain, Kuwait, and Jordan.

In recent months, the UAE reactivated diplomatic and economic channels with Iran while simultaneously strengthening its military ties with Israel and the US.

Tuesday’s missile strikes threaten to disrupt the atmosphere of normalisation that had returned to the UAE.

While Dubai’s financial district was once again filling with bankers, certain commercial activities between the emirate and Iranian ports had resumed.

Furthermore, several Iranian flights to the UAE had quietly resumed.

UAE authorities had also begun permitting the return of approximately 20,000 Iranians holding UAE residency permits who were outside the country when the war began.

UAE officials have repeatedly emphasised that the country seeks to avoid being drawn further into a broader regional war.

Nevertheless, efforts to de-escalate tensions between the UAE and Iran have come under increasing strain in recent weeks.

This month, the UAE accused Iran of attacking vessels belonging to the Abu Dhabi National Oil Company in the Strait of Hormuz.

To date, the US has imposed sanctions on thousands of Iranian individuals and legal entities; however, the Tehran administration continues to bypass these restrictions by rapidly establishing new structures to replace those that have been blocked.

In an assessment citing expert opinions published by the Reuters news agency, the current situation was likened to a game of whack-a-mole.

Whack-a-mole is known as a game of agility and reflexes based on the concept of hitting plastic figures with a mallet as they pop up unexpectedly from their holes.

Speaking to the agency, experts outlined other options that Washington could deploy to increase pressure on Tehran and raise the efficacy of sanctions.

Potential measures include restrictions targeting independent Chinese refineries, known as “teapots,” which account for a quarter of China’s oil refining capacity.

China purchases more than 80% of the oil exported by Iran, and these refineries process the vast majority of those shipments. Nevertheless, these facilities have limited ties to the US financial system, rendering them partially protected against secondary sanctions.

Another option on the table is increasing pressure on major Chinese banks. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has applied secondary sanctions to small firms based in China and Hong Kong accused of executing billions of dollars in transactions for Iranian oil.

The agency has also warned two large banks, though it has not yet included them on its sanctions list.

While taking steps against major banks could deter other financial institutions, such actions carry the risk of Beijing enacting retaliatory measures. Washington seeks to avoid such tension ahead of a potential meeting between US President Donald Trump and Xi Jinping in September.

Experts are also evaluating the possibility of enforcing a land blockade with the participation of Iran’s neighbours: Iraq, Türkiye, Pakistan, Azerbaijan, Turkmenistan, and Armenia.

The Trump administration holds various leverage mechanisms against such nations, including Pakistan, which is requesting a $10 billion swap line, and Türkiye, which seeks to rejoin the F-35 program. Analysts express, however, that implementing such a blockade on the ground and generating the expected pressure inside Iran would be difficult.

Trump has repeatedly voiced threats to impose secondary tariffs on countries that trade with Iran; however, the US Supreme Court struck down the legal basis for such measures.

On the other hand, a anti-Russia “crushing” sanctions bill passed by the Senate includes new restrictions on Iran and grants Trump tariff authority.

This bill must also pass a vote in the House of Representatives; however, the text faces opposition from both Democrats and certain Republican lawmakers.

US Treasury Secretary Scott Bessent announced in mid-August that Trump would disclose new measures designed to raise Iran’s economic isolation to an unprecedented level.

Stating that the US President had instructed the re-establishment of the maximum economic pressure policy against Tehran, Bessent said, “We have moved from Epic Fury to Economic Fury.”

Following Bessent’s statements, Bloomberg noted that Tehran has learned to manage the consequences of a naval blockade and thousands of restrictions. According to the agency’s analysts, the principal obstacle facing Washington is the close economic relationship between Iran and China; indeed, Beijing secures more than 90% of Iranian oil exports. Sanctioning the entities facilitating these purchases would directly reduce Tehran’s oil revenues, yet the US is avoiding this step for now.

Maritime traffic in the Strait of Hormuz remains restricted. On August 11, Iran conveyed its conditions for lifting the blockade in the strait to the US through intermediaries.

Tehran’s conditions included an end to threats and military actions, the lifting of the blockade and sanctions, compensation for damages, and the release of frozen assets.

On August 14, Trump claimed that following the end of the war with Iran, he would declare the Strait of Hormuz to be US territory. Responding to these statements, the Iranian Foreign Ministry warned that the Strait of Hormuz could not be seized “by a tweet, an aircraft carrier, an executive order, or a campaign speech.”

US President Donald Trump’s “Board of Peace” has drafted its first construction contract related to Gaza since it was established in January. According to an August 6 report by The Guardian, the contract provides for the construction of a basic 150-person military base where Moroccan troops would be stationed.

Trump established the Board of Peace to carry out his plans for the territory following Israel’s two-year assault on Palestinians in Gaza. The board has begun preparations for the International Stabilization Force that is due to operate in Gaza.

Morocco had agreed to send troops to the International Stabilization Force, which was created to maintain control in Gaza on behalf of Israel and the US.

Construction contract awarded to US firm active in Iraq

The construction contract was awarded to Louisiana-based Arkel International, which previously carried out various projects in Iraq on behalf of the US government.

However, a Board of Peace official said in an email to The Guardian that the contracts had not yet been finalized. “The Board is in the final stages of preparing various contracts. None has yet been finalized,” the official said.

The official said one of the possible contracts covered the construction of facilities for the International Stabilization Force to support the implementation of the security and governance arrangements in the road map. “This contract is one of many that will be necessary for Gaza’s future,” the official said.

150 troops initially, later 5,000

Under the contract, the base for Moroccan troops would be built on a site measuring 100 metres by 120 metres. The facility, which would house troops deployed on rotation from a base in Israel, would be located about two kilometres from the Israeli border.

The base is planned for the 60% of the Gaza Strip that is under direct occupation by the Israeli military.

According to a draft contract previously seen by The Guardian, the facility would later be expanded to accommodate 5,000 International Stabilization Force troops from different countries.

“Smart city” plan scaled back

Trump said in February 2025 that the US would “take over” Gaza and “own” it.

At the Board of Peace’s first meeting in January 2026, Trump’s adviser and son-in-law Jared Kushner unveiled a “master plan” aimed at transforming Gaza into a high-tech coastal “smart city”.

However, the Trump-led board later scaled back its sweeping ambitions for Gaza’s post-war reconstruction and shifted towards a limited pilot project in the southern buffer zone near Rafah.

The plan envisages “humanitarian aid” camps enclosed by “fences”, where Palestinians would be kept under strict control. Critics have described the compounds as “concentration camps”.

Israel has destroyed or damaged about 80% of the structures in Gaza, including homes, apartment buildings, hospitals, schools and mosques, in attacks aimed at making the territory uninhabitable.

Israeli ministers, settler activists and journalists have called for Gaza to be ethnically cleansed of its Palestinian population and opened to Jewish settlers.

Israel is reported to have killed at least 73,000 Palestinians in Gaza since October 2023, most of them women and children. Independent estimates indicate that the true death toll could run into the hundreds of thousands.