UAE blocks missile attack as Yemen's Houthis target region's business hub

The United Arab Emirates on Monday said it had foiled another Houthi missile attack following last week's deadly assault on the Gulf state as the Iran-aligned group takes aim at the safe haven status of the region's tourism and commercial hub.

Yemen's Houthis, battling a Saudi-led coalition that includes the UAE, have said they aim to make Abu Dhabi pay a high price for backing militias that are blocking Houthi attempts to capture prized oil regions.

The Houthis have repeatedly carried out cross-border missile and drone attacks on Saudi Arabia, and on Jan 17 the group raised the stakes with an unprecedented assault on the UAE.

The UAE defence ministry said it intercepted and destroyed two ballistic missiles on Monday with no casualties. It said remnants fell in separate areas around the capital Abu Dhabi and that it was taking protective measures against attacks.

The Houthi military spokesman said the group fired Zulfiqar ballistic missiles at al-Dhafra airbase in Abu Dhabi, which is used by the United States, alongside other "sensitive targets". The group launched drones at Dubai, he added.

"We advise foreign companies and investors in the UAE to leave as it has become unsafe," spokesman Yahya Sarea said, adding the group was ready to "meet escalation with escalation".

The coalition has in the past week conducted deadly air strikes in Yemen it says are aimed at crippling the capabilities of the movement in a conflict that is largely seen as a proxy war between Saudi Arabia and Iran.

The US embassy, in a rare security advisory for the UAE, on Monday urged its citizens to "maintain a high level of security awareness".

Monday's attack was the second on UAE soil since last week's strike that hit a fuel depot in Abu Dhabi, killing three people, and causing a fire near its international airport.

James Swanston of Capital Economics said further attacks could unnerve tourists planning trips to the UAE, and that any major hit on the OPEC member state's oil production facilities would pose a downside risk to GDP growth.

ESCALATION

The UAE, a major international travel hub, had so far escaped violence that has engulfed other Middle East states.

The Dubai benchmark stock index was down 2%, while the Abu Dhabi stock index declined 0.3% as of trading on Monday. Higher oil prices were providing support to markets, analysts said.

"It's pretty surprising (the attacks)...Overall I feel safe but I don’t know how it will escalate," American medical student Talia Rivera, 19, told Reuters at an Abu Dhabi shopping centre.

Spanish tourist Arabela Fernandez Rabena, 30, said she did not plan to cut short her holiday in one of the few countries open during the pandemic. "I think the Emirates is very strong and defend the people that live here."

The UAE, which has an advanced anti-missile interception system, on Monday published a video of what it described as an F-16 warplane destroying a Houthi missile launcher in Yemen.

The Houthis said Monday's operation also struck Saudi Arabia, where state media said remnants from an intercepted missile caused damage in a southern industrial area.

On Sunday night, state media said a ballistic missile fell near another region in the south, injuring two foreigners and causing damage in an industrial area.

The United Nations, which along with the United States has struggled to engineer a ceasefire for Yemen, has called for maximum restraint by both sides.

Coalition air strikes on Yemen killed at least 60 people in Saada province on Friday, and about 20 people in the Houthi-held capital Sanaa on Tuesday.

The coalition intervened in March 2015 after the Houthis ousted the government from Sanaa. The group says it is fighting a corrupt system and foreign aggression.