Iraq rejects UAE claims of Qatar financing paramilitaries.
UAE's foreign ministry declared the Qatari authorities paid various 'terrorist' groups around $1bn, a claim Doha denied.
Iraq has voiced concern over an Emirati official's remarks claiming the nation's Shia-dominated paramilitary forces have obtained funds from Qatar.
Iraq's foreign ministry spokesman Ahmed Mahjoub on Wednesday questioned the validity of the allegations made by the United Arab Emirates Foreign Affairs Minister Anwar Gargash.
"These remarks come as a hurdle at a time when Iraq is trying to strengthen its ties with the UAE," Mahjoob stated.
"They are a cause for concern over the prospect of fostering and developing connections," he told Russian news agency Sputnik.
In Twitter on Monday, Gargash accused the Qatari authorities of paying various "terrorist" groups around $1bn, naming Iraq's Popular Mobilisation Forces, the Lebanon-based Hezbollah movement, and al-Nusra Front, currently called Hay'et Tahrir al-Sham.
The accusations are the newest made by the Gulf emirate against Qatar.
UAE - together with Saudi Arabia, Bahrain, and Egypt - severed diplomatic ties with Doha in June last year and imposed an air, sea, and land blockade, while accusing Qatar of encouraging "extremism" and growing ties with Iran - their regional rival. Qatar has denied all allegations.
Ahmed Saeed al-Rumaihi, head of Qatar's media office for the foreign ministry, described Gargash's accusations as "baseless" and made without proof. The remarks were only "promoting lies", Rumaihi added.
Roughly 60 factions make up Iraq's Popular Mobilisation Forces (PMF, also called PMU) - an umbrella of armed groups rallied by Iraq's ethnic and tribal leaders.
PMF's 40 branches - comprising over 60,000 fighters - played a vital role in the struggle against the Islamic State of Iraq and the Levant (ISIL), which seized a large swath of Iraq in 2014, but today has been defeated.
Reported on Aljazeera News.