Regional rivals Iran and Saudi Arabia agreed Friday to restore ties and reopen diplomatic missions in Chinese-brokered talks, they said in a joint statement, seven years after relations were severed.
The move caps a broader realignment and efforts to ease tensions in the Middle East.
Riyadh cut ties with Tehran after Iranian protesters attacked Saudi diplomatic missions in the Islamic republic in 2016 following the Saudi execution of revered Shia cleric Nimr al-Nimr.
Shia-majority Iran and Sunni Muslim Saudi Arabia support rival sides in several conflict zones across the Middle East, including in Yemen where the Houthi rebels are backed by Tehran, and Riyadh leads a military coalition supporting the government.
"Following talks, the Islamic Republic of Iran and the Kingdom of Saudi Arabia have agreed to resume diplomatic relations and reopen embassies and missions within two months," Iran's state news agency IRNA said, citing the joint statement.
The official Saudi Press Agency also published the statement, which said talks took place in Beijing for five days immediately before the announcement.
Ali Shamkhani, the secretary of Iran's Supreme National Security Council, had travelled to Beijing on Monday for "intensive negotiations with his Saudi counterpart in China in order to finally resolve the problems between Tehran and Riyadh", IRNA said.
Iraq, a neighbour to both countries, had hosted several rounds of talks between Iran and Saudi Arabia since April 2021.
Those encounters were held at a relatively low level, involving security and intelligence officials.
Iran's Foreign Minister Hossein Amir-Abdollahian had said in July that the two countries were ready to move talks to a higher level, in the political and public spheres.
But no talks had been publicly announced since April last year.
In Friday's statement, Iran and Saudi Arabia said they "thank the Republic of Iraq and the Sultanate of Oman for hosting the talks held between the two sides in 2021 and 2022 as well as the leaders and government of the People's Republic of China for hosting and supporting the talks held in that country".
"The three countries expressed their keenness to exert all efforts towards enhancing regional and international peace and security," they said.
Other Gulf states had also scaled back their ties with Iran after the 2016 incident.
But in September, Tehran welcomed an Emirati ambassador back after a six-year absence. A month earlier, Iran said Kuwait had sent its first ambassador to Iran since 2016.
Another regional rupture took place in June 2017 when Saudi Arabia and its allies the UAE, Bahrain and Egypt cut ties with Qatar.
They claimed it "supported extremists" and was too close to Iran - allegations that Doha vehemently denied.
Those ties were mended in January 2021.
On Thursday Amir-Abdollahian was in Damascus where he welcomed Arab outreach to Syria's internationally isolated government after an earthquake struck Turkey and the war-torn country last month.
He also said Tehran, which has backed the Syria regime during its 12 years of conflict, which has killed around 500,000 Syrians and displacing millions more, would join efforts to reconcile Syria and Turkey, which has long supported rebel groups opposed to Syrian President Bashar al-Assad.
Ties between Riyadh and Ankara have also undergone a rapprochement since the 2018 killing of Saudi journalist and government critic Jamal Khashoggi in the kingdom's Istanbul consulate.
Turkish President Recep Tayyip Erdogan has pushed hard to revive bilateral ties, a move analysts describe as largely driven by economic considerations.