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Saudi says World Court could end Iran-UAE row

DUBAI, Jan 8 (Reuters) - A territorial row between Iran and the United Arab Emirates could best be resolved through the International Court of Justice as Tehran has rejected regional mediation, Saudi Arabia's foreign minister said.

"One party, Iran, has declined to allow an opportunity for direct negotiations," Prince Saud al-Faisal said in remarks carried by the Saudi newspaper al-Watan on Monday.

"The ICJ is the best means to end the dispute if direct negotiations could not be held," he said.

Iran and the United Arab Emirates are at odds over three small but strategic islands -- Abu Musa and the Greater and Lesser Tunbs -- located near key oil shipping lanes at the mouth of the Gulf. They are held by Iran and claimed by the UAE.

Iran has rejected a mediation bid by Gulf Arab states to resolve the dispute and refused to receive a Gulf Cooperation Council (GCC) ministerial committee which was set up in 1999 to mediate a peaceful solution to the long-standing row.

Iran says the islands are an integral part of its territory, but that it is ready to hold talks with the UAE to clear up any "misunderstandings."

A communique issued after a two-day GCC summit in December voiced support for the rights of the UAE to the three islands and urged Tehran to agree to refer the dispute to the International Court of Justice.

The GCC comprises Saudi Arabia, Bahrain, Kuwait, Qatar, Oman the UAE and Bahrain.

Relations between Iran and most GCC states have improved since Iranian President Mohammad Khatami, a moderate, was elected in 1997. But the dispute over the islands has hindered a further improvement of ties.

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