Qatar has announced a deal with Italy for an order of seven new warships amid the ongoing diplomatic crisis with neighbouring Gulf nations.

"We have signed a contract on behalf of the Qatari navy to acquire seven warships from Italy for €5 billion ($5.9 billion)," Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani said at a joint news conference with his visiting Italian counterpart Angelino Alfano.

Saudi Arabia, Egypt, Bahrain and the United Arab Emirates cut all diplomatic and trade ties with Qatar in June after accusing the state of backing terrorist-linked groups as well as being too close to regional rival, Iran.

Qatar has denied the claims made by the blockade in what is one of the worst crises to hit the area for decades.

The two ministers discussed the ongoing dispute

In June last year, a similar deal was announced with Italy which included the construction of four corvette warships, two support vessels and an amphibious landing platform dock.

Construction on those vessels will begin in 2018 in Italy with Italy's state-controlled shipbuilder Fincantieri heading up the plans and the defence company Leonardo set to supply the electronics and weapons systems.

On Tuesday 1 August, Qatar filed a complaint over the ongoing blockade to the World Trade Organisation.

The complaint could mark the first formal step in the WTO's dispute resolution process, which would force the countries to sit down and negotiate with Qatar.

Should a settlement not be reached within 60 days, the dispute would go to a WTO-appointed panel.