UAE Vice President and Prime Minister, and Ruler of Dubai Sheikh Mohammed bin Rashid al-Maktoum has accepted an invitation to visit Tehran from Iranian President Hassan Rouhani.
The invitation was extended to the Dubai Ruler by Iranian Foreign Minister Mohammad Javad Zarif during a visit to Dubai on 15 April.
The visit will represent a significant warming of relations between the UAE and will further fuel expectations that the UAE and Iran will finally reach an agreement over islands that both nations claim in the Gulf.
The complex dispute goes back to 1971, the year the UAE was formed, when Tehran seized control of the islands of Abu Musa, Greater Tunb and Lesser Tunb after Iran and the UAE failed to agree on their sovereignty.
In January it appeared the dispute might be coming to an end when US-based magazine Defense News reported that Iran had reached an agreement with the UAE to hand over sovereignty of disputed islands near the Strait of Hormuz.
The report said the two sides have been engaged in secretive talks via the Omani government, with a deal reached on the Greater and Lesser Tunb islands. A deal was also being ironed out on the third island, Abu Musa, with Iran retaining the sea-bed rights surrounding all three territories.
In December last year, Iranian Foreign Ministry spokeswoman Marziyeh Afkham said press reports about a hidden agenda for striking a deal with the UAE over the islands were merely media hues and cries.