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DUBAI (Reuters) - Britain and the United Arab Emirates launched a joint military exercise dubbed "Sea Dagger 2017", Emirati state news agency WAM reported on Sunday.

The exercise, which WAM said was aimed at "training on the planning, implementation and management of joint military operations", takes place as Gulf Arab and American rivalry with nearby Iran continues to simmer.

Saudi Arabia and its smaller Gulf Arab neighbours accuse Iran of seeking to spread its power in the Arab world at their expense by backing Shi'ite Muslim militants in conflicts throughout the region, a charge Tehran denies.

A U.S. Navy destroyer fired warning shots at four Iranian military vessels in the Strait of Hormuz last week.

(Writing by Noah Browning; Editing by Catherine Evans)