The United Arab Emirates has turned away a plane carrying top officials with the Canadian government and military, a second mark of diplomatic disapproval from the Middle East country over a disagreement about commercial landing rights.

The UAE government closed its airspace to the plane on Monday. It was carrying Defence Minister Peter MacKay, Veterans Affairs Minister Jean-Pierre Blackburn and Chief of the Defence Staff, Gen. Walt Natynczyk.

A military source told CTV News the group was on its way from a visit to Afghanistan. They were reportedly bound for Europe.

Earlier in the day, MacKay confirmed that years-long negotiations concerning commercial landing rights in Canada had stalled and Canada would therefore be vacating a once-secret military base near Dubai.

"There have been discussions going on between the minister of foreign affairs and his counterpart. These discussions have been going on for some time," MacKay told reporters in Kandahar, where he was wrapping up a two-day tour.

"At this point we will abide by the wishes of the Emirates, and... we will be leaving the base."

The UAE government had threatened to kick Canada out of Camp Mirage -- a military base located near Dubai -- if Ottawa did not approve new Canadian landing rights for national carriers Emirates and Etihad Airways.

On Sunday, Mohammed Abdullah al Ghafli, the UAE's Canadian ambassador, said the failed negotiations would "undoubtedly affect" bilateral relations between the two countries.

"It is unfortunate that this process has been so protracted and frustrating," said al Ghafli.

But MacKay simply said that Canada was "very grateful for what the United Arab Emirates have allowed us to do within their country."

"They have been very supportive of the Canadian mission, supportive of the mission writ large, and for that we thank them," he said.

The UAE has complained that its two airlines have only six flights a week to Toronto, ferrying passengers from Dubai and Abu Dhabi. And with 27,000 Canadians living in the UAE, al Ghafli has argued there is a need for greater air service between the two countries.

Air Canada, however, has protested expanding the landing rights of UAE carriers, arguing that few people fly from the UAE over to Canada. Air Canada claims that UAE carriers are taking Canadians to other places, while making stopovers in Dubai and Abu Dhabi.

The Associated Press reported that Emirates and Etihad declined to offer comment Monday. Air Canada could not immediately be reached for comment.

Bilateral trade between Canada and the UAE is worth $1.5 billion annually.

Afghan withdrawal

Vacating the base will mean that Ottawa has to find a new supply route to the war-torn country, since Camp Mirage is Canada's sole logistics hub in the region.

It was also expected that Camp Mirage would play a key role in the planned withdrawal of Canadian troops from Afghanistan next year.

But MacKay insists the Canadian Forces are capable of making new arrangements ahead of the July 2011 end date of its Afghan combat mission.

"We'll always act in Canada's best interests and one thing I know about the Canadian forces, they're very adaptable," MacKay said.

"They have alternative plans, they have contingency plans. With that in mind we're going through the various options that are before us right now."

Liberal MP John McCallum said the dispute is "not good for either side," and advised that "in true diplomatic fashion, the Canadian government at the highest levels should approach the UAE to seek a cooling-off period."

For years, Canada has enjoyed an agreement to operate out of Camp Mirage, which is reportedly housed within a larger Emirati military base in a remote part of the desert country.

However, the agreement expired in June. Under its terms, each party could cancel the arrangement with a month's notice.

With files from The Canadian Press