Bahrain has announced the recalling of its ambassador to Tehran for consultations after what it said were repeated hostile Iranian statements.
Authorities also said an arms smuggling plot by two Bahrainis with ties to Iran had been foiled.
The announcements were made on the eve of a tour of some Arab states by Iranian Foreign Minister Mohammad Javad Zarif aimed at calming tensions following a historic nuclear deal between Tehran and world powers.
Most Gulf Arab states are concerned that the July 14 accord will hasten a rapprochement between Tehran and Washington that could embolden Iran to heighten support for paramilitary groups across the Middle East.
Announcing the arrests on Saturday, the interior ministry said the two suspects had admitted receiving shipment of explosives, automatic weapons, and ammunition from Iranian handlers outside Bahrain's territorial waters. It added that one had received military training at a Revolutionary Guards camp in Iran in 2013.
There was no immediate comment from Iran on the Bahraini statement.
Bahrain has reported a growing number of attacks using homemade explosives, some of them deadly, in the past two years and has accused a banned Shia opposition group called Saraya al-Ashtar of responsibility for some of them.
Sunni-ruled Bahrain, home to the US Navy's Fifth Fleet, often accuses Shia Iran of seeking to subvert Bahrain.
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Iran denies interfering in Bahrain, although it acknowledges it does support opposition groups seeking greater political and economic rights for Bahrain's Shia community.
Bahraini state media reported on Saturday that the Supreme Council for Islamic Affairs (SCIA) "strongly denounced the repeated blatant Iranian interference in Bahrain's internal affairs in order to shake up the kingdom's stability and fan tension".
Shortly after, parliament's foreign affairs committee announced the envoy's recall and demanded an extraordinary Arab summit to discuss "Iranian interference".
Bahrain did not specify what the hostile comments were.
Last Sunday, Bahrain summoned Iran's acting charge d'affaires to protest against Iran's Supreme Leader Ali Khamenei voicing support for "oppressed people" across the Middle East, including in Bahrain.