Iran on Thursday said it seized a United Arab Emirates vessel and summoned the UAE envoy after two of its fishermen were shot dead in an incident in the Gulf.

The foreign ministry said the boat was seized on Monday after UAE coastguard vessels "opened fire on several Iranian fishing boats... leading to the deaths of two fishermen", adding that it had summoned the UAE charge d'affaires to protest.

"The Emirati boat was seized by coast guards of the Islamic republic of Iran because it was sailing illegally in our waters, and its crew have been arrested," a statement added.

The incident comes amid high tensions between the two countries following last week's surprise announcement that the UAE has agreed to normalise ties with Israel under a US-brokered deal.

Iran has condemned the agreement, with President Hassan Rouhani calling it a "big mistake" and warning "against opening the path of Israel to the region", without elaborating on what that would mean.

Rouhani's remarks were seen as "threats" by the UAE which on Sunday summoned the Iranian charge d'affaires in Abu Dhabi to protest "unacceptable and inflammatory" rhetoric.

The UAE, which downgraded its relations with Iran in 2016 amid fierce rivalry between Tehran and Emirati ally Saudi Arabia, said the remarks "had serious implications for security and stability in the Gulf region".

Iranian fishermen seen in this 2015 picture clean their nets after unloading their catch in the southern port of Chabahar
Iranian fishermen seen in this 2015 picture clean their nets after unloading their catch in the southern port of Chabahar AFP / Atta KENARE

Establishing diplomatic ties between Israel and Washington's Middle East allies, including the oil-rich Gulf states, has been central to US President Donald Trump's regional strategy to contain Iran.

Thursday's announcement by Tehran of the incident comes a day after Trump said the United States will activate a controversial mechanism aimed at reimposing UN sanctions on Iran.

This follows last week's US defeat at the UN Security Council when it failed to muster support for a resolution to extend a conventional arms embargo on Iran.

Tehran has been at loggerheads with Washington since 2018, when Trump unilaterally withdrew from the historic 2015 nuclear deal between Iran and world powers and reimposed sanctions.

On Thursday, the foreign ministry said that the UAE government had expressed "its deep regret" for the incident resulting in the deaths of two Iranian fishermen and "announced its willingness to make compensation for any damage caused".

Despite strained ties, Iran and the UAE have longstanding economic links and the Emirates are home to a significant Iranian expatriate community.

Last year, Iran received a coastguard delegation from the UAE aimed at reviving maritime security talks.