A fire broke out at an oil pipeline near the village of Buri in Bahrain on Friday night and was swiftly contained by the emergency services, reported BNA, citing the Interior Ministry.
Bahrain's Interior Ministry made the announcement on Saturday afternoon, alleging that Iran was in communication and guiding those responsible for the pipeline explosion and other attacks.
The Bahraini foreign minister, Sheikh Khaled bin Ahmed, said the huge explosion that detonated in Buri, just outside the capital city of Manama, was an intentional act of terrorism and sabotage.
Bahrain has been combating a low-level insurgency since the Sunni monarchy quashed a 2011 Arab Spring uprising led by majority Shiites.
The interior minister of Bahrain on Saturday said the recent oil pipeline fire was "a terrorist act", according to a statement issued by the country's Interior Ministry, APA reports quoting AA.
Bahrain has accused Iranian terrorists of blowing up a strategic oil pipeline and causing a massive inferno near a hospital and market.
Bahraini authorities have launched an investigation into the incident.
The government denies it discriminates against Shiites and accuses neighboring Iran of stirring up tensions, which Tehran refutes.
Bahrain, home to the U.S. Navy's 5th Fleet, faces occasional attacks from local Shiite militant groups as the kingdom ruled by the Sunni Al Khalifa family continues a crackdown on all dissent, imprisoning or forcing politicians and activists into exile.