Iranian Foreign Ministry spokesman Mohammad Ali Hosseini said on Sunday that there was no need for any mediation over the islands, saying if there was any "misunderstanding between the countries it will be resolved through bilateral talks".
The three islands are controlled by non-Arab Iran but claimed by the UAE with broad Arab support.
"It seems the Iranian side does not want to understand," a UAE Foreign Ministry official said. "There is no ‘misunderstanding’ between us but an actual occupation. There is no occupied land more sacred than any other. Occupation is occupation whether it is by Israel or Iran or any other country."
An Arab League summit in March pledged support for the UAE, calling for a peaceful resolution to the dispute in the Gulf, which it said would help improve relations between the Arab world and Iran.
Conservative Gulf Arab states are uncomfortable with the spread of Iranian influence, particularly after the US-led invasion of Iraq, yet the Islamic Republic is one of the UAE’s top trading partners.
UAE Prime Minister Sheikh Mohammed bin Rashid Al Maktoum visited Iran in February and the Iranian president visited the UAE in 2007.
Libyan leader Muammar Gaddafi told the summit the UAE should seek international arbitration in the dispute but there has been little progress toward resolving the dispute.
