By Caroline Hawley BBC correspondent, Baghdad

Iraq has reopened its border crossing with Saudi Arabia for the first time since it was shut after the Iraqi invasion of Kuwait in 1990.

The move is the latest sign of improving relations between Saudi Arabia and Iraq since the Gulf War in 1991, when Saudi airbases were used for American bombing raids.

The two countries still do not have diplomatic relations, but they have been doing increasing amounts of trade and, with the threat of another American led war, Iraq is keen to improve its relations with Saudi Arabia.

One of the first to take advantage of the new rapprochement was a large delegation of Saudi trade officials and businessmen who crossed into the country to take part in Baghdad's annual international trade fair, which opens on Friday.

Critical time

Before the Gulf War the Ar'ra border crossing was a major trade route between the two countries, but for the past 12 years it has been opened only to allow Iraqi pilgrims to visit the Muslim holy sites in Saudi Arabia.

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Saudi goods imported by Iraq under the UN's oil for food programme have had to be transported via Jordan.

The reopening of the Ar'ra crossing will mean they can be trucked straight across the border.

But it is also important for Baghdad at a critical time for the country.

Iraq and Saudi Arabia began a process of reconciliation at a summit of Arab leaders in March.

If the US does attack Iraq, Baghdad is hoping hard that Saudi Arabia will not let its territory be used again to help the Americans.