DUBAI (Reuters) - Iran and Saudi Arabia agreed on Friday to re-establish relations after seven years of hostility which had threatened stability and security in the Gulf and helped fuel conflicts in the Middle East from Yemen to Syria.
The deal was announced after four days of previously undisclosed talks in Beijing between top security officials from the two rival Middle East powers.
Tehran and Riyadh agreed to resume diplomatic relations and re-open embassies within two months, according to a statement issued by Iran, Saudi Arabia and China. "The agreement includes their affirmation of the respect for the sovereignty of states and the non-interference in internal affairs," it said.
In recent years Saudi Arabia has blamed Iran for missile and drone attacks on the kingdom’s oil facilities in 2019 as well as attacks on tankers in Gulf waters. Iran denied the charges.
Yemen’s Iran-aligned Houthi movement has also carried out cross-border missile and drone attacks into Saudi Arabia, which leads a coalition fighting the Houthis, and in 2022 extended the strikes to the UAE.
Friday's agreement, signed by Iran's top security official, Ali Shamkhani, and Saudi Arabia's national security adviser Musaed bin Mohammed Al-Aiban, agreed to re-activate a 2001 security cooperation accord, as well as another earlier pact on trade, economy and investment.
China's top diplomat Wang Yi described the deal as a victory for dialogue and peace, adding that Beijing would continue to play a constructive role in addressing tough global issues.
A White House national security spokesperson said the United States was aware of reports of the agreement and welcomed any efforts to help end war in Yemen and de-escalate tensions in the Middle East.
Long-standing strategic ties between Saudi Arabia and the United States have been strained under President Joe Biden's administration over the kingdom's human rights record, the Yemen war and more recently ties with Russia and OPEC+ oil production.
In contrast, Saudi Arabia's growing ties with China were highlighted by the high profile visit of President Xi Jinping three months ago.
"MOVING IN RIGHT DIRECTION"
Iran and Saudi Arabia, respectively the two leading Shi'ite and Sunni Muslim powers in the Middle East, have been at odds for years and backed opposite sides in proxy wars from Yemen to Syria and elsewhere.
Saudi Arabia cut ties with Iran in 2016 after its embassy in Tehran was stormed during a dispute between the two countries over Riyadh's execution of a Shi'ite Muslim cleric.
Normalising relations offered great prospects for both countries and for the Middle East, Iranian Foreign Minister Hossein Amirabdollahian said, hinting at further steps.
"The neighbourhood policy, as the key axis of the Iranian government’s foreign policy, is strongly moving in the right direction and the diplomatic apparatus is actively behind the preparation of more regional steps," Amirabdollahian tweeted.
A senior Iranian official said that addressing the tensions with Saudi Arabia had become a top priority for Tehran in recent months and would help resolve long-running talks on Iran's nuclear programme.
"It will encourage the West to reach a nuclear agreement with Iran," the official told Reuters.
Saudi Arabia and its allies have long pressed global powers to address their fears about Iran's missile and drone programmes in their efforts to revive a 2015 nuclear agreement with Tehran.
Cinzia Bianco, research fellow at the European Council on Foreign Relations, said Riyadh had been seeking security guarantees from the Iranians, which may have been addressed by the re-activation of the 2001 security accord.
Iran may also have responded positively to Riyadh's calls for it to "actively push the Houthis to sign a peace agreement with Saudi Arabia that frees the Saudis from the Yemen war which has become a quagmire", Bianco said.
"If those two (issues) are in place I am confident and positive about the deal."
Saudi Foreign Minister Prince Faisal bin Farhan Al Saud said in January that progress was being made towards ending the Yemen conflict.
Responding to Friday's announcement, Oman Foreign Minister Badr Albusaidi said on Twitter that the resumption of Saudi-Iranian diplomatic ties was a "win-win for everyone and will benefit regional and global security".
Oman and Iraq hosted talks between Iran and Saudi Arabia in 2021 and 2022.