* UAE was supposed to host Gulf cbank, foreign minister says
* Country says location terms must change for it to rejoin
By Nerijus Adomaitis
VILNIUS, May 22 (Reuters) - The United Arab Emirates foreign minister said on Friday the Gulf state would consider rejoining a Gulf monetary union if terms change and its neighbours agree to allow a joint central bank to be based in the country.
It is rare for policymakers of the states of the Gulf Cooperation Council (GCC), run by ruling families, to air political disagreements in public.
Foreign Minister Sheikh Abdullah bin Zayed al-Nahayan left the door open on Thursday for the UAE to rejoin the euro zone-style single currency, a day after pulling out, but did not elaborate on what conditions would have to be met. [ID:nLL85621]
Speaking to Reuters during a visit to Lithuania on Friday, Sheikh Abdullah said: "If the terms are different, we will look positively to that. At the moment the terms are unacceptable for the UAE, and that's why we decided not to join."
The second-largest Arab economy broke ranks with Saudi Arabia and three other Gulf states this week by withdrawing from the long-troubled plan in protest of a May 5 decision to base the joint central bank in the Saudi capital, Riyadh.
Asked what terms would have to change, Sheikh Abdullah said that up until last year, only the UAE had been a contender to host the joint body that would be responsible for managing and issuing Gulf currency notes and coins.
In September 2006, the UAE central bank governor had said capital city Abu Dhabi was chosen by GCC states as the central bank headquarters, comments later retracted by GCC policymakers.
Prior to the location decision this month by Gulf heads of state, Saudi Arabia, Qatar and Bahrain also said they wanted to host the bank -- and Saudi Arabia, the largest and most-influential country in the region, was chosen in the end.
"When I say the terms, the UAE was the first country supposed to host the central bank, and we believe we had the right to do so. (It) did not happen," Sheikh Abdullah said.
"All the other countries did not mention anything about hosting the central bank till last year. For the first four years it was only the UAE which was a candidate to host the bank So this is where we are today."
PUBLIC OUTCRY
The UAE's public outcry marks a divergence from Gulf decision-making typically kept behind closed doors to preserve an image of harmony, analysts said.
When Oman pulled out of monetary union in 2006, it did not describe why that decision was taken. Kuwait, meanwhile, said its choice to drop its currency's dollar peg in 2007, contravening a deal by the bloc to keep it until union, was a purely economic decision as it sought to fight inflation.
Analysts have said the UAE decision to quit monetary union marked a protest against Saudi Arabia's dominance over Gulf decision-making.
Sheikh Abdullah declined to comment when asked if Saudi Arabia had proposed the UAE take the presidency of the central bank as a concession for sticking with the project, as some Gulf officials have said had happened.
The minister had said earlier the UAE opted not to use its veto over Gulf decisions so it wouldn't stall the project.
"We will hope for all the best for the others who have joined the monetary union, and, as I've said, if the terms are different, we would look into it positively," he said. (Writing by Daliah Merzaban in Dubai)