Flag carrier El Al Israel Airlines said on Thursday it would not be able to maintain a full flight schedule to Dubai from Sunday due to disagreements over security arrangements in Dubai.
El Al said tens of thousands of Israelis who had already purchased tickets will not be able to fly.
Nonstop flights from Tel Aviv to Dubai on El Al and smaller Israeli rivals Israir and Arkia were among the fruits of a landmark 2020 deal establishing ties between Israel and the UAE.
Hundreds of thousands of Israelis have visited the UAE commercial hub since. The three carriers often offer about 10 flights a day to Dubai.
Israir and Arkia were not immediately available for comment.
Dubai authorities have so far not commented on the issue.
Israel's Shin Bet security service has voiced concerns - which it did not publicly detail - about arrangements at Dubai International Airport.
It has suggested that UAE capital Abu Dhabi could serve as an alternative for the Israeli carriers, should they no longer be able to fly to Dubai. But industry officials said that was not a commercially viable option.
Emirati state carrier flydubai operates direct Dubai-Tel Aviv flights and Dubai's Emirates has been looking to launch flights to Israel. Etihad Airways and Wizz Air fly from Abu Dhabi to Tel Aviv.