Saudis restore ties with Iraq

"The two sides have agreed to restore their diplomatic representation" and "develop their cooperation in the security field with an exchange of expertise," the statement said without elaborating.

Ties with Riyadh were broken off by then president Saddam Hussein's regime during the 1991 Gulf war when US-led multinational forces used Saudi Arabia as a springboard to free neighbouring Kuwait from Iraqi occupation.

Saudi Arabia also pledged to deliver on a promise first made late last year of one billion dollars in aid for Iraq's reconstruction.

"Saudi Arabia reiterates its readiness to move forwards in the implementation of the programme it has already announced to support the reconstruction process in Iraq to the sum of one billion dollars," the statement said.

The pledge was first made at an international donors' conference in Madrid last year.

Meanwhile, US President George W. Bush on Thursday lifted sanctions placed on Iraq in 1990, when Iraq was run by Saddam Hussein, who was toppled last year by US-led troops.

"I have determined that the situations that gave rise to these national emergencies have been significantly altered by the removal of the regime of Saddam Hussein and other developments," Bush said in a statement. US-led forces toppled Saddam and occupied Iraq.