Somaliland on Thursday denied claims that it agreed to take resettled Palestinians or host an Israeli military base in return for Israeli recognition of its independence, rejecting the allegations as false.

Israel last week became the first country to recognise Somaliland as an "independent and sovereign state," triggering protests across Somalia.

On Wednesday, Somali President Hassan Sheikh Mohamud, citing intelligence reports, told Al Jazeera that Somaliland had accepted three conditions from Israel: the resettlement of Palestinians, the establishment of a military base on the Gulf of Aden, and joining the Abraham Accords to normalize ties with Israel.

Somaliland's Foreign Ministry denied the first two conditions.

"The Government of the Republic of Somaliland firmly rejects false claims made by the President of Somalia alleging the resettlement of Palestinians or the establishment of military bases in Somaliland," it said in a statement on X.

It said the deal was "purely diplomatic."

"These baseless allegations are intended to mislead the international community and undermine Somaliland's diplomatic progress," it added.

But analysts say an alliance with Somaliland is especially useful to Israel for its strategic position on the Bab el-Mandeb Strait, close to the Iran-backed Houthi rebels in Yemen, who have struck Israel repeatedly since the start of the Gaza war.

Somaliland unilaterally declared independence in 1991 and has enjoyed far more peace than the rest of conflict-hit Somalia, establishing its own elections, currency and army.

Its location alongside one of the world's busiest shipping lanes has made it a key partner for foreign countries.