Gulf countries announce the decision amid an ongoing row with the Lebanese group over involvement in regional conflicts.
Iran’s deputy foreign minister has said that a decision by a Saudi-led bloc of Gulf Arab states to label the Lebanese group Hezbollah a terrorist organisation was a “mistake”.
Iranian state TV on Thursday quoted Hossein Amir Abdollahian as saying that the Gulf Cooperation Council’s (GCC) move would undermine peace in the region and the unity of Lebanon.
He said it was a “new mistake” by the GCC and that Iran was “proud” of Hezbollah.
On Wednesday, GCC Secretary-General Abdullatif al-Zayani said that the six Gulf monarchies took the decision because “the [Hezbollah] militia recruited young people [from the Gulf] for terrorist acts”.
Hezbollah, a Shia political organisation with an armed wing, fights in neighbouring Syria to support the government of President Bashar al-Assad.
The Sunni-dominated GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Gulf nations have taken a series of measures against Hezbollah since Saudi Arabia last month halted a $4bn programme funding French military supplies to Beirut.
Hezbollah is backed by Saudi Arabia’s regional rival Iran, with whom relations have worsened this year. The two nations are on opposing sides in conflicts in Syria and Yemen.
Announcing the military funding cut last month, a Saudi official said that the kingdom had noticed “hostile Lebanese positions resulting from the stranglehold of Hezbollah on the state”.
He specifically cited Lebanon’s refusal to join the Arab League and the Organisation of Islamic Cooperation in condemning attacks on Saudi diplomatic missions in Iran in January.
Hezbollah Secretary-General Hassan Nasrallah lashed out at Saudi Arabia during a televised speech on Tuesday.
“Does Saudi Arabia have the right to punish Lebanon, its state and its army because a certain party has decided to raise its voice?” he asked.
“If they have a problem with us, let them keep it with us, and let them spare Lebanon and the Lebanese,” Nasrallah added.
Jamal Abdullah, head of the Gulf Studies Unit at the Al Jazeera Centre for Studies, said he did not believe that the Gulf decisions targeted Lebanon as a whole.
“The relations between Gulf states and Lebanon are governed by diplomatic norms and strong links from their shared membership in the Arab League,” Abdullah said.
The GCC supported Hezbollah throughout the past three decades in its resistance against Israel. However, the bloc has always condemned Hezbollah’s military intervention in Syria.
“This was a milestone in the nature of the relationship between Hezbollah and Gulf countries,” Abdullah said.