Kuwait's appeals court on Monday reduced a death sentence on two Iranians and a Kuwaiti to life in prison and upheld a life term on a stateless man on charges of spying for Iran, a judiciary source said.

The court however confirmed the acquittal of a man and a woman, both Iranians, while a Syrian who was sentenced to life by the lower court too was acquitted, the source said.

The two Iranians and the Kuwaiti who were handed the life terms worked for the Kuwaiti army at the time of their arrest in May 2010.

The defendants were accused of spying for Iran and of passing information on the Kuwaiti and US military in the Gulf emirate to the Islamic republic's Revolutionary Guards, an accusation Iran has denied.

The defendants, throughout the trial, denied the charges and insisted they had been tortured to extract confessions.

The case strained relations between Kuwait and neighbouring Iran, prompting a tit-for-tat expulsion of diplomats.

Ambassadors and diplomats later returned to both capitals following a visit by Iran's Foreign Minister Ali Akbar Salehi to Kuwait City on May 11 last year.

The ruling is not final as the case will now go to Kuwait's supreme court where a final verdict will be issued.