Saudi Arabia, which has had frosty ties with Iraq's Shi'ite-led government, has named an ambassador to Baghdad for the first time since Saddam Hussein invaded Kuwait in 1990, Iraqi Foreign Minister Hoshiyar Zebari said on Tuesday.
Iraq is preparing to host an Arab League summit at the end of March that has been twice delayed by regional turmoil and acrimony between Baghdad and some Sunni Arab Gulf states over a crackdown by Bahrain's Sunni rulers on Shi'ite protesters.
"For the first time since 1990, the Saudis have named an ambassador to Iraq. This is a very positive development," Zebari told Reuters, without elaborating.
Saudi Foreign Ministry spokesman Osama Nugali said: "We nominated our ambassador in Jordan as ambassador for Iraq as well, but he will not be residing in Iraq."
A successful summit in Baghdad would help restore Iraq's place in the Arab world and perhaps contribute to allaying Gulf states' concerns about Iran's influence in post-war Iraq.
Saudi Arabia was alarmed when its U.S. ally's invasion of Iraq in 2003 brought Iranian-backed Shi'ite factions to power in elections after the overthrow of Saddam's Sunni-based rule.
Iraq also has strong ties to Syria, Iran's only Arab ally, which the Arab League has suspended over President Bashar al-Assad's violent suppression of an 11-month-old uprising.
Baghdad has often accused Saudi Arabia and Turkey of meddling in its affairs, especially after a 2010 election that kept Shi'ite Prime Minister Nuri al-Maliki in office under a power-sharing deal among Sunni, Shi'ite and Kurdish blocs.
That deal has been severely strained since U.S. troops withdrew in December and Maliki sought the arrest of a Sunni vice president and moved to oust a Sunni deputy premier. His actions prompted fears among Sunnis that the Iraqi leader was trying to consolidate his power further at their expense.
Saudi officials had said they feared the American military withdrawal would allow Iran to increase its influence in Iraq.
Saudi Arabia has also worried that the rise of Shi'ite power in Iraq could stir unrest among its own Shi'ite minority.
For their part, Iraqi Shi'ite officials see a Saudi hand in autonomy demands in mainly Sunni border provinces.