After the United Arab Emirates (UAE) recalled its ambassador to Iran in April due to increased tensions over an island dispute, recent events and statements show that both sides want to bring relations back to normal.

On Monday, UAE Deputy Prime Minister and Minister of Presidential Affairs Sheikh Mansour Bin Zayed Al Nahyan received Iranian Minister of Economy and Finance Syed Shams Al Deen Hussaini's delegation, when the two sides agreed to boost bilateral economic and trade ties.

The delegation's visit took place a day after Iran's President Mahmoud Ahmadinejad invited UAE President Sheikh Khalifa Bin Zayed Al Nahyan to attend the annual summit of the Non-Alignment Movement to be held in September in Tehran.

It was also the first ministerial level visit from Tehran to Abu Dhabi since the UAE recalled its envoy to Iran on April 12 " for consultations," following a visit by Ahmadinejad to Abu Musa, a disputed Iranian island in the Gulf which Abu Dhabi claims as its territory, calling the trip a "flagrant violation of the UAE sovereignty."

Iran and the UAE both claim territorial sovereignty over the three islands -- the Greater and Lesser Tunbs, and Abu Musa -- in the Persian Gulf and have been at odds over them for decades.

Nevertheless, the UAE and Iran are traditionally strong trade partners and have in the past shown flexibility in overcoming diplomatic tensions. Re-exports from the UAE to Iran grew 29 percent in 2011 to reach 31 billion Dirham (8.4 billion U.S. dollars). However, a new round of sanctions from Western and European Union (EU) states which target Iran's central bank and financial transactions with Tehran have dampened bilateral trade.

On June 4, UAE Minister of Economy Sultan Al-Mansouri criticized these sanctions, saying that "they even weigh on trade of humanitarian goods such as food deliveries. The issue is with the financial transactions ... regarding that, it has been affected."

The minister added that history showed that sanctions and embargoes "hit people who are most in need of basic food supplies. "

Some 8,000 Iranian-held firms operate in the UAE, while about 200,000 Iranian nationals reside in the Gulf state. Despite territorial disputes, for both sides, detente is not more than diplomatic cosmetics but an economic necessity.