Iraq's pledge was contained in the final communique from the Arab League summit in Beirut, which also called for both sides to work to resolve disputes over prisoners of war.

Warm words between Iraq and Saudi Arabia

Arab leaders in response urged an end to UN sanctions against Baghdad and rejected any new military campaign against Saddam Hussein's regime - an indirect reference to recent US threats.

In an immediate reaction, a State Department spokesman said Washington was "profoundly sceptical" of the agreement reached between Kuwait and Iraq.

Embrace

Live television pictures beamed back to Iraq from the Beirut summit showed a public display of harmony and reconciliation, with Crown Prince Abdullah of Saudi Arabia embracing and kissing Iraqi delegation head Ezzat Ibrahim.

Iraq has never evidenced any real intent to respect Kuwaiti sovereignty. It has a deplorable record of flouting its international obligations and UN Security Council resolutions

State Department spokesman

Mr Ibrahim said his country respected the security of Kuwait and that his government hoped that such overtures would secure outright support against US threats.

Iraq has been engaged in a strenuous effort to try to improve ties with the rest of the Arab world, a diplomatic offensive given added urgency following President Bush's condemnation of Baghdad as part of the "axis of evil."

US threat

The BBC's Rageh Omaar in Baghdad, says Iraq's announcement shows just how seriously it is trying to build support among the Arab world to help prevent any American-led military action.

Washington has accused Iraq of developing weapons of mass destruction and insists that Baghdad allow United Nations weapons inspectors back into the country.

State Department spokesman Richard Boucher expressed pessimism over reports that Baghdad would respect Kuwaiti sovereignty.

"If true, that would be good, but Iraq has never evidenced any real intent to respect Kuwaiti sovereignty. It has a deplorable record of flouting its international obligations and UN Security Council resolutions," he said.

Significant

The Beirut Declaration welcomes "Iraq's confirmation to respect the independence, sovereignty and security of the state of Kuwait and guarantee its safety and unity to avoid anything that might cause a repetition of what happened in 1990."

Both Kuwaiti and Iraqi nationals are still missing from the Gulf War

BBC diplomatic correspondent Barnaby Mason says the deal does not resolve all the disputes between Kuwait and Iraq, being more a starting point for doing so.

But it is highly significant, he says, a solemn Iraqi undertaking endorsed by all the Arab states.

Speaking on his return to Kuwait City, Kuwaiti Foreign Minister Sheikh Sabah al-Ahmed al-Sabah said he was completely satisfied with the agreement with Iraq, the French news agency AFP reported.

Iraq invaded its neighbour in August 1990. Nine months later, it was ousted by a US-led multinational coalition.