The United Arab Emirates' defence ministry said on Tuesday that it had detected two ballistic missiles launched from Iran, the first such incident reported since a May 4 strike on the Fujairah port.
In a statement later, the ministry said the missiles targeted "maritime traffic" based on its assessments. Both missiles fell into the sea, it said.
Iran's foreign ministry spokesperson Esmaeil Baghaei rejected early on Wednesday the statement by the UAE, describing it as "baseless."
In a statement issued after the missile threat, the UAE said it had suspended all trade activities, commercial exchanges and financial transactions with Iran until further notice, citing an escalation that it said undermined regional and international peace and security.
The missile launch comes as a 60-day window for US-Iranian peace talks expired on Monday without a breakthrough, raising fears of a new escalation in the conflict that has disrupted shipping through the Strait of Hormuz since February.
"The defence ministry affirms its full readiness to deal with any threats and firmly confront anything that aims to destabilise the state's security," it said in a statement.
The UAE's interior ministry sent a phone alert earlier on Tuesday to residents stating that the situation was safe and people should resume normal activities after an earlier alert warning of a missile threat.
The UAE had accused Iran recently of attacking its state-owned ADNOC vessels while transiting the Strait of Hormuz. Iran has not claimed responsibility for the attacks on ADNOC vessels.
Iran's Revolutionary Guards have previously threatened action against vessels transiting the strait if they are linked to Tehran's adversaries or fail to comply with Iranian directives.
(Reporting by Menna Alaa El-Din and Ahmed Tolba; Editing by Alex Richardson, Alexandra Hudson, Lisa Shumaker and Mark Porter)
