"The airlines of the southern Persian Gulf countries flying to Iran are warned to use the term Persian Gulf on their electronic display boards," Road and Transport Minister Hamid Behbahani said in comments in the daily Iran newspaper.

"Otherwise they will be banned from Iranian airspace for a month the first time and upon repetition their aircraft will be grounded in Iran and flight permits to Iran will be revoked," he added.

The warning seemed directed at airlines based in the Gulf countries and flying into Iran, but the newspaper report also said Iran had taken action against a foreign employee of one of its own airlines.

A Greek employee of Iranian commercial carrier Kish Air had been fired for using the term "Arabian Gulf" on a display board, and the airline had been asked to apologize over the incident.

The Saudi Arabia-based Islamic Solidarity Sports Federation said last month it had scrapped the Islamic Solidarity Games, which were to be held in Iran in April because of a dispute over whether the Gulf waterway is "Arab" or "Persian.”

Designation of the key waterway for global oil and gas supplies has long been a touchy issue among the countries bordering it — Saudi Arabia, Kuwait, Qatar, Bahrain, the United Arab Emirates, Oman, Iraq and Iran.

Iran claims it is the Persian Gulf, the Arab states say it is Arab.

The dispute over Iran's nuclear energy program, which Tehran says is aimed solely at generating electricity, is part of a wider concern among Arab governments over Iranian expansionism in the Middle East.