History

The U.A.E. was formed from the group of tribally organized Arabian Peninsula Sheikhdoms along the southern coast of the Persian Gulf and the northwestern coast of the Gulf of Oman. This area was converted to Islam in the 7th century; for centuries it was embroiled in dynastic disputes. It became known as the Pirate Coast as raiders based there harassed foreign shipping, although both European and Arab navies patrolled the area from the 17th century into the 19th century. Early British expeditions to protect the India trade from raiders at Ras al-Khaimah led to campaigns against that headquarters and other harbors along the coast in 1819. The next year, a general peace treaty was signed to which all the principal sheikhs of the coast adhered. Raids continued intermittently until 1835, when the sheikhs agreed not to engage in hostilities at sea. In 1853, they signed a treaty with the United Kingdom, under which the sheikhs (the "Trucial Sheikhdoms") agreed to a "perpetual maritime truce." It was enforced by the United Kingdom, and disputes among sheikhs were referred to the British for settlement.

Primarily in reaction to the ambitions of other European countries, the United Kingdom and the Trucial Sheikhdoms established closer bonds in an 1892 treaty, similar to treaties entered into by the U.K. with other Gulf principalities. The sheikhs agreed not to dispose of any territory except to the United Kingdom and not to enter into relationships with any foreign government other than the United Kingdom without its consent. In return, the British promised to protect the Trucial Coast from all aggression by sea and to help out in case of land attack.

In 1955, the United Kingdom sided with Abu Dhabi in the latter's dispute with Saudi Arabia over the Buraimi Oasis and other territory to the south. A 1974 agreement between Abu Dhabi and Saudi Arabia would have settled the Abu Dhabi-Saudi border dispute; however, the agreement has yet to be ratified by the U.A.E. Government. The border with Oman also remains officially unsettled, but the two governments agreed to delineate the border in May 1999.

In 1968, the U.K. announced its decision, reaffirmed in March 1971, to end the treaty relationships with the seven Trucial Sheikhdoms which had been, together with Bahrain and Qatar, under British protection. The nine attempted to form a union of Arab emirates, but by mid-1971 they were unable to agree on terms of union, even though the termination date of the British treaty relationship was the end of 1971. Bahrain became independent in August and Qatar in September 1971. When the British-Trucial Sheikhdoms treaty expired on December 1, 1971, they became fully independent. On December 2, 1971, six of them entered into a union called the United Arab Emirates. The seventh, Ras al-Khaimah, joined in early 1972.

In 1981, mainly in response to the threat to regional security posed by the Iran-Iraq War, the UAE joined with Saudi Arabia, Kuwait, Bahrain, Qatar, and Oman to form the Co-operation Council for the Arab States of the Gulf, now the Gulf Co-operation Council (GCC).

Throughout the 1980s, the UAE had striven with difficulty to maintain neutrality in the Iran-Iraq War. That conflict was also a source of internal UAE tension because Abu Dhabi tended to support Iraq while Dubayi was more sympathetic to Iran. After the war ended in 1988, Iran appeared to single out the UAE for special and friendly attention. By 1992 the UAE was the Arab country with which Iran had the closest commercial relations. Thus, the crisis that erupted in April 1992 over disputed islands in the Persian Gulf seemed unexpected.

The UAE and Iran continue to dispute the ownership of three islands, Abu Musa and the Greater and Lesser Tunb Islands, which are strategically located in the Strait of Hormuz. All three islands were effectively occupied by Iranian troops in 1992. The Mubarak field, which is located six miles off Abu Musa, has been producing oil and associated natural gas since 1974. In 1995, the Iranian Foreign Ministry claimed that the islands are "an inseparable part of Iran." Iran rejected a 1996 proposal by the Gulf Cooperation Council (GCC) for the dispute to be resolved by the International Court of Justice, an option supported by the UAE. In early 1996, Iran took further moves to strengthen its hold on the disputed islands. These actions included starting up a power plant on Greater Tunb, opening an airport on Abu Musa, and announcing plans for construction of a new port on Abu Musa. In the dispute, the UAE has received strong support from the GCC, the United Nations, and the United States. Although Iran remains a continuing concern for officials in Abu Dhabi, they have chosen not to escalate the territorial dispute. Iran is one of Dubai's major trading partners, accounting for 20 percent to 30 percent of Dubai's business.

The U.A.E. sent forces to liberate Kuwait during the 1990-91 Gulf War. The Iraqi invasion and occupation of Kuwait were a shock to the UAE. Prior to that crisis, the UAE had tried to demonstrate solidarity on inter-Arab issues. In particular, it had supported the cause of Palestinian Arabs, both within the League of Arab States (Arab League), of which it was a member, and within international forums. In practical terms, this meant that the UAE did not recognize Israel. When Egypt signed a separate peace agreement with Israel in 1979, the UAE joined other Arab states in breaking diplomatic relations with Egypt. The UAE did not, however, expel the thousands of Egyptian workers in the UAE or interfere with their transfer of remittances home. For the UAE, the crisis over Kuwait demonstrated a lack of Arab unity on a critical Arab issue. The UAE joined the Arab states that opposed the Iraqi invasion and supported the use of force to compel Iraq's withdrawal of troops

More fundamental for the UAE, this crisis exposed the failure of the GCC, of which the UAE had been a founding member in 1981, as a deterrent collective security organization. Although it was not prepared to abandon the GCC--it derived other benefits from this alliance with Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia--the UAE believed that new security arrangements were necessary. The UAE initially supported expanding the GCC framework to include formal military ties with Egypt and Syria. When this option seemed unrealistic, the UAE concluded that a security relationship with the United States should be continued. Consequently, negotiations began during the summer of 1991 and continued for more than a year. In late 1992, officials of both countries signed an agreement that permitted the United States to use some UAE bases temporarily and to pre-position supplies on UAE territory.

Dubai is strongly linked to the September 11, 2001, attack on the United States; more than half of the hijackers flew directly out of Dubai International Airport to the United States. In response to concerns that the UAE banking system had been used by the 9/11 hijackers to launder funds, in mid-2002 the UAE adopted legislation giving the Central Bank the power to freeze any suspected accounts for seven days without prior legal permission. In addition, banks have been advised to carefully monitor transactions passing through the UAE from Saudi Arabia and Pakistan, and are now subject to more stringent transaction and client reporting requirements. As of late 2004, however, evidence suggested that al Qaeda was continuing to use Dubai as a logistical hub for international travel, planning, and finance.