In a speech marking the 33rd anniversary of the creation of the UAE carried by the local press, Shaikh Khalifa on Thursday called for settling the issue "through direct dialogue and talks according to a clear-cut agenda or as per the principles of the international law, including the referral of the case to the International Court of Justice (ICJ), if there is a need for that.
"We believe that the best way to iron out difference between nations is through building good relations based on mutual respect, neighbourliness and reciprocal interests," he said.
"This environment opens promising horizons for fruitful cooperation between the countries of the region on the one hand and with other countries of the world on the other."
Iran gained control of three islands - Greater Tunbs, Lesser
Tunbs and Abu Musa - after British forces left the Gulf in 1971. The islands are situated roughly half way between the Iranian port of Bandar-e Langeh and Dubai in the UAE.
The UAE federation, established in 1971 following Britain's pullout from the Gulf, includes Abu Dhabi, Ajman, Dubai, Fujaira, Ras al-Khaima, Sharja and Um al-Qaiwain.