Continuing conflict, competition and rivalry have been a regular phenomenon in the Gulf region over the past few decades. Among other reasons, the troubled relationship between the Gulf Cooperation Council (GCC) countries and Iran has been one of the major factors responsible for the present state of affairs in the region. The relationship has been marked by sectarian and ideological differences, clash of interests over the presence of the US in the region, concerns over the Iranian nuclear programme and territorial disputes between Iran and the United Arab Emirates (UAE). Efforts at reconciliation have not been very productive until now, though several attempts have been made by both sides. If the situation in the region continues as it is now, it has the potential to severely impact other developments in the neighbourhood. It may affect the unfolding situations in Iraq and Yemen; and may also have repercussions on nuclear non-proliferation and the presence of major powers in the region.