ERBIL, Kurdistan Region of Iraq – The United Arab Emirates on Saturday denied allegations that it had released frozen Iranian assets worth billions of dollars, describing the reports as “entirely false and unfounded,” as Tehran has made the issue a key condition in a possible peace deal with the US.

Reuters on Friday, citing several regional sources, reported that the UAE had agreed to release Iranian frozen assets worth more than $10 billion. One source said more than $3 billion had already been delivered to Iran, while another asserted that the move was agreed in exchange for a halt to Iranian attacks on the UAE.

Throughout the recent regional conflict, the UAE was targeted by Tehran more than any other regional state, including Israel, with Iran regularly citing Abu Dhabi’s cooperation with Israel and the presence of US military installations on its territory as justification.

“The United Arab Emirates has categorically denied reports published by certain international media outlets alleging the transfer of funds from the UAE to the Islamic Republic of Iran, including allegations concerning USD 3 billion,” the UAE foreign ministry said in a statement.

The foreign ministry further described the allegations as “entirely false and unfounded,“ stressing that no frozen Iranian funds have been released, transferred, or facilitated through the UAE.

Iran has repeatedly called for the release of its frozen assets, describing it as a key condition and guarantee for reaching a deal with the US since the beginning of peace talks.

The ministry also called on media outlets to “exercise accuracy, rely on official sources, and refrain from publishing or circulating unverified information and unfounded allegations.”

Iran has sought to include the lifting of restrictions on its assets in any propsective peace agreement with the US, coming as both Tehran and Washington have touted an imminent accord.

The Reuters report noted that it was unable to ascertain whether the supposedly freed funds "belong to the UAE or originate in ​long-blocked Iranian accounts in the UAE banking system, or elsewhere," adding that a UAE official, when questioned by the outlet ahead of the foreign ministry denial, said that the developments come as Abu Dhabi seeks to ease tension and foster peace in the region.

Longstanding tensions between Iran and the UAE escalated again in May after Israeli Prime Minister Benjamin Netanyahu’s office claimed he had held a “secret” meeting with UAE President Mohamed bin Zayed Al Nahyan in the Emirates during the US-Israeli war on Iran.

The developments prompted Iranian warnings that those who collaborated with Israel would be held “accountable,” although the UAE later denied the visit occurred.

Iranian lawmaker Ali Khezrian said in May that the UAE is classified as hosting “hostile bases” under the Islamic Republic’s security doctrine, adding that the same designation applies to the Kurdistan Region.

In Iranian defense doctrine, such a designation allows Tehran to conduct preemptive strikes on actors that could pose a threat to its security, generally encompassing foreign military facilities and, in the Kurdish case, dissident armed groups.