UAE raid raises Yemen stakes, draws closer scrutiny of Iran allies

A general view of the Abu Dhabi skyline is seen, December 15, 2009. REUTERS/Ahmed Jadallah
  • First direct Houthi hit on US-allied UAE
  • Houthis warn UAE's arm will be 'cut'
  • No direct effect on Iran nuclear talks
  • UAE backs forces fighting Houthis in Yemen
  • Sharper focus likely on Iran network of allies

DUBAI, Jan 18 (Reuters) - By attacking the United Arab Emirates the Houthis sought to warn the Gulf state to stay out of a battle for prized energy regions in Yemen, where the Iran-aligned group has been angered by losses to forces backed by the powerful U.S. ally.

The UAE is unlikely to cede. Instead, one likely consequence of Monday's deadly strike is sharper international scrutiny of Iran's ties to the Houthis and other paramilitary forces that vie with Gulf Arab monarchies for influence around the Middle East, regional analysts said.

The unprecedented raid on Abu Dhabi, a futuristic metropolis of gleaming skyscrapers, showed the Houthis able to hit a second foreign adversary at long range, undaunted by threats of retaliation that followed similar attacks they have carried out against Saudi Arabia.

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The Houthis raised the prospect of more such attacks.

The UAE, a Saudi ally, "should stop tampering in Yemen or have its arm, and those of others, cut," Houthi spokesman and chief negotiator Mohammed Abdulsalam said on Monday.

Regional sources say that while the attack poses no specific threat to the region's top diplomatic priority -- efforts to revive a 2015 Iranian nuclear deal -- it deepens Gulf Arab doubts about Tehran's willingness to defuse regional tensions.

Iran issued a carefully worded statement. Its foreign ministry, commenting on what it called "recent Yemen-linked developments", said on Tuesday that military attacks were not a solution to the crisis in the region.

"The attacks would not impact the nuclear talks in Vienna. These are two separate issues," a senior Iranian official said on condition of anonymity. "What happened yesterday was the result of ongoing crisis in Yemen."

The assault, which the Houthis said involved missiles and drones, may strengthen a Saudi and UAE argument that the U.S. approach to Yemen, which places a priority on human rights and has misgivings about the death toll from Saudi air strikes, has merely emboldened the Houthis, analysts and a Gulf source said.

PROXY CONFLICT

"The Houthis aren't interested in peace and remain hostage to their regional backer, which treats our region's security as a mere negotiating card," Saudi deputy defence minister Prince Khaled bin Salman tweeted on Tuesday, referring to Iran.

The Houthis -- de facto authorities in north Yemen after ousting the government from the capital, Sanaa, in late 2014 -- say they are fighting foreign aggression in the form of a Saudi-led coalition that includes the UAE.

Monday's attack may complicate periodic talks between Saudi Arabia and Iran on ending Yemen's war, and could affect Emirati engagement with Tehran, the analysts and Gulf source said.

The UAE opted for de-escalation with Tehran after a 2019 assault on Saudi Arabia's energy heartland that drew no conventional military response from ally Washington.

Direct talks between Saudi Arabia and Iran launched last year have mostly focused on the Yemen war -- largely seen as a proxy conflict between the Sunni Muslim and Shi'ite powerhouses.

Biden's administration made ending the war in Yemen a foreign policy priority. Last year it halted support for offensive operations by a Saudi-led coalition, unsuccessfully pressed Riyadh to lift a blockade on Houthi-held areas to secure a truce and revoked the Houthi movement's terrorist designation.

But fighting has only escalated as the alliance moved to reverse Houthi gains in the energy producing Marib region, with Emirati-backed Yemeni forces entering the fray this month.

"Houthi attacks targeting UAE and Saudi Arabia are very likely to continue through 2022 as fighting in Yemen's Marib... is likely to further intensify," said Jack A. Kennedy, head of Middle East Country Risk, IHS Markit, adding Abu Dhabi was expected to boost its involvement following Monday's strike.

REPERCUSSIONS

The UAE said on Monday it reserved the right to respond to the Houthi strike, and on Tuesday called for a UN security council meeting to condemn the incident. read more

The Gulf source said immediate repercussions would be in Yemen and against the Houthis, while the UAE gathers evidence on where the drones were manufactured and launched.

Gulf Arab states have stressed the need to address Iran's missiles and regional behaviour along with its nuclear programe.

"Saudi and the UAE will continue to talk to Iran, but this sends another negative signal that you cannot trust Iranian intentions," said Riyadh-based Gulf Research Center's Abdulaziz Sager, saying there was "no way" the Houthis would do this without Iranian knowledge.

An Iranian security official told Reuters the Houthis "don't need Iran's or any other country's approval or help". Tehran denies charges it gives financial and military aid to the group.

Analysts and bankers in the region said further strikes on the UAE, a regional commercial and tourism hub, could impact sectors such as tourism, a main driver of the economy.

"The attacks serve as a reminder of conflict risks that investors are used to in the wider region, but have not closely associated with the UAE," said Hasnain Malik, head of equity strategy at Tellimer.

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Additional reporting by Aziz El Yaakoubi, Saeed Azhar and Hadeel Al Sayegh, Editing by William Maclean

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