UAE Foreign Minister Sheikh Abdullah bin Zayed al-Nahayan on Tuesday spoke of Iran's "occupation" of the islands, located near shipping lanes.
Abu Musa and the Greater and Lesser Tunbs are controlled by non-Arab Iran but claimed by the UAE with broad Arab support. Both countries are major exporters and members the Organization of the Petroleum Exporting Countries (OPEC).
In comments that angered Tehran, UAE state news agency WAM quoted Sheikh Abdullah as saying: "Occupation of any Arab land is occupation…Israeli occupation of Golan Heights, southern Lebanon, West Bank or Gaza is called occupation and no Arab land is dearer than another."
Sheikh Abdullah also said Iran was rejecting all UAE initiatives to resolve the three-decade-old territorial dispute, either through direct dialogue or international arbitration.
Iranian Foreign Ministry spokesman Ramin Mehmanparast said he hoped the UAE minister had been misquoted, the semi-official Mehr News Agency reported on Saturday.
"What has been quoted about the Iranian islands and the comparison made between the Islamic Republic of Iran and the Qods occupying regime (Israel) has made our people highly sensitive," Mehmanparast said.
"The repetition of such statements will ensure the intense reaction of the Iranian people," he added.
The UAE, a U.S. ally, and Iran have strong trade relations but diplomatic ties were strained after Iran installed maritime offices on one of the disputed islands in 2008.
(Reporting by Hashem Kalantari in Tehran and Raissa Kasolowsky in Dubai; writing by Fredrik Dahl; editing by Angus MacSwan)
