The United Arab Emirates has agreed to unlock billions of dollars for Iran as part of a reported arrangement aimed at reducing tensions following weeks of conflict, according to four sources familiar with the matter.

Two regional sources told Reuters that the UAE had agreed to release a total of $10 billion, with more than $3 billion already delivered. Two other sources said the value of the funds involved could reach $20 billion, adding that the move was agreed in exchange for a halt to Iranian attacks on the Gulf state.

Reuters could not independently verify whether the funds involved belong to the UAE or come from Iranian accounts that have been blocked in the UAE banking system or elsewhere.

The UAE foreign ministry later denied reports of the transfer, including claims involving $3 billion, saying the allegations were “entirely false and unfounded” and that no frozen Iranian funds had been released, transferred or facilitated through the country.

A UAE official said the country’s policy was focused on reducing regional tensions and supporting efforts toward stability.

“The UAE’s foreign policy is guided by promoting de-escalation and reducing tensions across the region, while advancing lasting peace and stability,” the official said.

Reported agreement follows months of tensions

The reported arrangement comes during wider negotiations between Iran and Washington over ending the conflict, with diplomats saying discussions could involve the release of tens of billions of dollars in Iranian oil revenues frozen in foreign banks under U.S. sanctions.

Relations between Iran and the UAE had deteriorated during the conflict, with Iranian attacks affecting the Gulf state and raising concerns over security in a country known as a major business hub.

One source told Reuters, the arrangement could allow both sides to claim progress without crossing political red lines: Iran could present the funds as compensation linked to wartime damage, while Washington could maintain that it had not provided direct financial support.

The source added that the deal could also lead to renewed economic cooperation and intelligence sharing between Iran and the UAE.

Another source said Iran had approached at least two other Gulf Arab countries about similar arrangements.

Talks accelerated after regional contacts

According to one source, discussions began several weeks ago but moved faster after officials from Iran’s Islamic Revolutionary Guard Corps visited Abu Dhabi and met Sheikh Tahnoun bin Zayed al Nahyan, the UAE’s national security adviser and deputy ruler of Abu Dhabi.

The visit was followed by UAE officials travelling to Tehran to negotiate details of the arrangement, the source said.

The last known direct Iranian attack on the UAE was on May 4, when a strike targeted Fujairah port on the Gulf of Oman.

Dubai’s role in Iran’s financial network

The reported move comes against the backdrop of significant Iranian-linked assets held in Dubai, the UAE’s main commercial center and an important economic connection for Tehran.

Dubai banks have historically held substantial Iranian-linked deposits, many of which are now restricted under U.S. sanctions that affect access to the global dollar financial system.

The reported agreement also comes as negotiations continue over issues including the security of shipping through the Strait of Hormuz, a key route for global energy flows.