U.S. intelligence agencies learned this spring that China was secretly building what they suspected was a military facility at a port in the United Arab Emirates, one of the U.S.’s closest Mideast allies, according to people familiar with the matter.

Alarmed, the Biden administration warned the Emirati government that a Chinese military presence in its country could threaten ties between the two nations. After rounds of meetings and visits by U.S. officials, construction was recently halted, according to people familiar with the matter.

The intelligence findings and U.S. warnings concerned a site at a port near the Emirati capital of Abu Dhabi. People familiar with the matter said it appeared the Emirati government, which hosts U.S. military forces and is seeking to buy advanced American jet fighters and drones, was unaware of the military nature of China’s activity.

China’s effort to establish what U.S. officials believe would be a military foothold in the U.A.E.—and the Biden administration’s push to persuade the Emiratis to stop the base from being built—reflect the challenges the administration faces in attempting to compete with Beijing globally.

The Middle East increasingly appears to be a primary ground for U.S.-Chinese competition. The U.S. played a central role in the region for decades, supporting the creation of the state of Israel, basing troops in the region, and recently brokering the Abraham Accords that normalized relations between Israel and some Gulf states, including the U.A.E. Beijing has countered with trade deals and vaccine diplomacy—and now appears to be trying to expand its military presence.