The United Arab Emirates' decision to refuse an Israeli a visa to compete at an international tennis tournament could throw Gulf Arab plans to attract some of the world's top sporting events into disarray.

Gulf states have poured billions of dollars into building state-of-the-art stadiums and buying stakes in sports franchises from soccer to motor racing as they seek to wean their economies away from oil and shift their image away from politics.

But the UAE, which like most Arab states has no diplomatic ties to Israel, provoked a political storm this week when it denied Shahar Peer a visa to play in the Dubai WTA tournament on the grounds local tennis fans would have boycotted the event.

The decision violated Women's Tennis Association (WTA) rules, which state that any player should be able to compete where she wishes if she has the required ranking. The WTA Tour is now considering whether to remove Dubai from its international calendar.

"It's a difficult decision for them (UAE), they are damned if they do and damned if they don't," said a Western diplomat based in the UAE. "The UAE will deal with it on a case by case basis and weigh up the political and security angle."

The UAE and nearby Qatar's ultimate ambition is to bring high-profile events like the Olympic [Images] Games or soccer World Cup to the Arab world for the first time.

But while the Gulf has tried to distance itself somewhat from the Middle East's politically-charged reputation, Israel's recent three-week offensive against the Gaza strip, which killed 1,300 Palestinians and 14 Israelis, has angered Arabs.

NO ROOM FOR COMPROMISE

Analysts and diplomats say the UAE cannot be expected to make the monumental political decision to establish ties with the Jewish state for the sake of sports alone, but neither can it host international sporting events and leave Israelis out.

"There is no room for compromise on this," said Mustafa Alani, analyst at the Gulf Research Centre. "It is a sovereign decision and Dubai cannot budge on it. Dubai won't have this issue for every event, but for a major event they would have to look at this issue seriously."

The UAE already hosts an increasing number of world-class sporting events such as the Dubai Desert Classic golf tournament, which is part of the European Tour.

Once media-shy Abu Dhabi is set to host its first Formula One race later this year. Sheikh Mansour bin Zayed al Nahyan had already propelled the state on to the international sporting arena when his Abu Dhabi United Group took ownership of English soccer club Manchester City in 2008.

Dubai's tennis championships could soon be held in a purpose-built $4 billion Dubai Sports City, which once completed will house the International Cricket Council's [Images] global cricket academy, the Butch Harmon school of golf and Manchester United's [Images] first purpose-built soccer school among others.

But what would happen if Liverpool soccer club, who have an Israeli in their squad, were to win the European Champions League soccer tournament this year as that would qualify them for the forthcoming Club World Cup in Dubai?

Dubai has made exceptions before. Israelis with a second passport can enter the country and Israeli ministers were allowed to attend the 2003 International Monetary Fund meetings held in Dubai.

DOHA DIFFERENT DYNAMICS

Policies toward Israel differ across the Gulf Arab region and cases can be coloured by the politics of the day.

While the UAE has never had official relations with Israel, Qatar, the only Gulf state to allow low-level diplomatic ties with the Jewish state, cut them in the wake of the Gaza assault.

Peer herself became the first Israeli to play a tennis tournament in the Gulf when she took part in a Qatar tennis event in 2008. Until the Gaza offensive, which ended last month, high-ranking Israeli officials had attended conferences in Doha.

Doha's failure last June to make an International Olympic Committee (IOC) shortlist for cities bidding for the 2016 Summer Games was officially down to the dates proposed by the Qatari capital -- in October to avoid the summer heat -- and the fact they were clashing with major sports seasons in Europe and North America.

But Doha officials were not convinced, especially as the IOC's working group had rated it as the third best overall bid.

"This was not a technical decision," Qatari bid leader Hassan Ali bin Ali, said at the time of the shortlist announcement. "It is a pity that they have closed the door on the Middle East."

Not to be deterred, Qatar has put itself forward for the 2018 and 2022 World Cup bids.

"Qatar is different," said Alani. "It's much easier on this than the UAE and (Qatar) will look at it (Israel) with a sympathetic view if they were to win (the right to host) the event."

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