The United Arab Emirates navy is thought to have opened fire on a small patrol vessel from Saudi Arabia after a dispute over water boundaries.According to one report, two Saudi sailors were injured in the alleged bombardment. The Saudi vessel was forced to surrender, and its sailors were delivered into custody in Abu Dhabi for several days, before being released and handed over to the Saudi embassy earlier this week.
The incident has shocked diplomats who hope the countries, both key American allies, will help implement the West's strategy to constrain Iran's nuclear and military ambitions.
The clash happened in disputed waters between the coasts of Saudi Arabia, Abu Dhabi and the peninsula on which the gas-rich state of Qatar sits. The seabed is rich with oil deposits, while the Dolphin pipeline project to carry natural gas direct from Qatar to Abu Dhabi has provoked irritation in the Saudi authorities. Nevertheless, direct conflict between the two countries' armed forces is highly unusual.
The Gulf is one of the most heavily armed regions in the world. The Saudi government has been building up its army and air force for years in response to what it sees as a regional threat from Iran.
The UAE was slower to join the arms race, despite a long-running row with Iran over three Gulf islands previously under Abu Dhabi control which were seized by the late Shah in 1971 on the night the Emirates celebrated their independence.
But now the UAE, despite its small size, is the fourth largest purchaser of weaponry on the international market in the world.