Egypt, Saudi Arabia, the United Arab Emirates and Bahrain have severed diplomatic relations with Qatar, which is an ally of Washington and home to a US military base.
Saudi Arabia accused Qatar of supporting militants and destabilising the region. But Qatar rejected the claims and said that decision to cut ties was based on lies.
Iran, which is Saudi Arabia’s regional arch-rival, blamed the diplomatic crisis on US Presiddent Donald Trump’s hawkish tone during a visit to Riyadh last month.
Hamid Aboutalebi, deputy chief of staff of Iran's President Hassan Rouhani, made reference to Mr Trump’s traditional sword dance with the Saudi king.
"What is happening is the preliminary result of the sword dance,” he tweeted, after the Arab countries halted all land, sea and air traffic with Qatar.
Mr Aboutalebi said that the “era of cutting diplomatic ties is over” and called for regional dialogue to resolve the crisis.
Saudi state news agency SPA accused Qatar of supporting what it described as Iranian-backed militants in its Shi'ite Muslim-populated Eastern region of Qatif and in Bahrain.
Qatar has also been expelled from Saudi-led Arab coalition fighting the he Iranian-backed Houthi group in Yemen.
Donald Trump takes part in a sword dance during a visit to Riyadh
Iranian Foreign Minister Javad Zarif tweeted: "Neighbours are permanent; geography can't be changed. Coercion is never the solution. Dialogue is imperative, especially during blessed Ramadan."
US Secretary of State Rex Tillerson said that the US has encouraged its Gulf allies to resolve their differences.
But Mr Trump’s recent visit may have emboldened Saudi Arabia and the other countries joined together to cut ties with Qatar.
Jean-Marc Rickli, from the Geneva Centre for Security Policy, told Reuters: “You have a shift in the balance of power in the Gulf now because of the new presidency: Trump is strongly opposed to political Islam and Iran
Get Quotes on Home Insurance
"He is totally aligned with Abu Dhabi and Riyadh, who also want no compromise with either Iran or the political Islam promoted by the Muslim Brotherhood."
The cutting of ties mark the renewal of a four-year effort to isolate Qatar. Egypt and the Gulf Arab states have long resented Qatar's support for Islamists, especially the Muslim Brotherhood.
First 100 days of President Trump Fri, March 24, 2017
President Donald Trump is making a significant impact on global politics during his first term.
EPA 1 of 22
US President Donald J. Trump gets in the driver's seat of an 18-wheeler while meeting with truck drivers and trucking CEOs on the South Portico prior to their meeting to discuss health care at the White House in Washington, DC
Yemen, Libya's eastern-based government and the Maldives have also followed suit and cut off diplomatic ties with Qatar.