The Bush administration appears to have backed away from a threat to impose stricter controls on US exporters to the United Arab Emirates in response to its ally’s efforts to clamp down on the diversion of dual-use items to Iran.

Industry sources told the Financial Times on Monday that the US Department of Commerce had put pressure on the UAE, an important trans-shipment centre, to step up scrutiny of its exports as part of a broader effort to isolate Iran over its nuclear programme.