Oman's ministry of interior is holding talks with UAE authorities after Omanis blocked roads and rallied near a government building to protest against new visa rules.
Sharjah police increased their presence on the UAE side of the border on Friday after about 300 people blocked the Oman side of the Butinah crossing, resulting in congested traffic at the Corniche crossing, according to Tarek Khalil of Al Marsa Musandam, a dhow operator.
Protesters "stayed the whole day [on Friday] and would not let anyone pass from the Emirati side", he said.
Under the new regulations, UAE residents can only cross the border at the Corniche checkpoint.
They must send a copy of their passport and visa to their hotel, while those who book with dhow and dive companies must send their details 48 hours in advance.
Visitors must also provide UAE authorities with proof of a booking.
Businesses said the restrictions on the unofficial border crossing at Dibba were affecting their trade and free crossing. An Oman ministry official said: "We are talking to the UAE border officials to find a mutual solution that will benefit traders, tourists and residents from both sides. I am sure we will reach a middle ground so we can remove any barriers that exist."
Andrew Moore, the owner of Freestyle Divers on the Sharjah side of Dibba, said he has had to stop travelling to dive sites in Musandam.
"Normally we are up there every weekend," he said. "Unless we get big groups now we don't go. It's too much of a mission.
"Too many customers would get to the border and get turned around, even if they had permission. It's very annoying as the diving up there is amazing."
It is not only divers who have been affected.
"We used to take a lot of day trippers up there who wanted to see the coastline but not at the moment," Mr Moore added.
The alternative crossing was congested over the weekend.
"It's very busy on a Friday with tourists and we have the Six Senses Resort, too," Mr Khalil said. "There was traffic the whole day at the seaside border."
He said a second protest at the governor's building did not disperse until the crowd of up to 300 was told that the government hoped to resolve the situation by tomorrow.
Sharjah authorities said they were enforcing a Ministry of Interior directive. It does not affect those in the UAE on tourist visas.
Mr Khalil said his business, which depends on walk-in customers, has suffered since the rules came into effect three months ago.
"It would affect the tourism to Dibba," he said. "It limits people to enter as they please. A lot of people used to camp on the beach and now they can't do that.
"A long time ago people used to come here, wander around and take a boat without any proper notice. Now they can't do that without applying for a border pass."
Oman's tourism ministry was not available for comment.