RIYADH: Iran officially reopened its embassy in Saudi Arabia on Tuesday, a Reuters witness said, following a deal to re-establish ties and ease a long rivalry that fuelled conflicts across the Middle East.

A ceremony was held inside the embassy's compound with dozens of diplomats and officials attending the reopening of the diplomatic mission for the first time in seven years.

"We consider today an important day in the relations between Islamic Republic of Iran and Saudi Arabia," Iran's Deputy Foreign Minister for Consular Affairs Alireza Bikdeli said.

"The region will move Inshallah (God willing) towards greater cooperation and convergence to achieve stability, prosperity and progress," Bikdeli said in a speech during the ceremony.

Saudi, Iranian foreign ministers to meet to pave way to re-open embassies

In March, Iran and Saudi Arabia agreed, in a deal brokered by China, to end a diplomatic rift and re-establish relations following years of hostility that had endangered regional stability including in Yemen, Syria and Lebanon. The deal also highlighted China's growing influence in the Middle East.

Saudi Arabia severed relations with Iran following the storming of its embassy in Tehran in 2016 after a dispute over the execution of a Muslim cleric.

The relationship had begun worsening a year earlier, after Saudi Arabia and the United Arab Emirates intervened in Yemen's war, where the Iran-aligned Houthi movement had ousted a Saudi-backed government and taken over the capital Sanaa.

The kingdom also has blamed the Islamic Republic for missile and drone attacks on its oil facilities in 2019 as well as attacks on tankers in Gulf waters. Iran denied the charges.

"Diplomacy is the best means for communication and dialogue between countries to reach a common understanding," Bikdeli said.