Iran is pushing for a regional security pact

"This is not just our wish but that of Iran as well. We are in agreement on the desire for fruitful co-operation between Iran and the UAE and other Gulf Arab states," the Saudi minister said.

"We are not mediators," he said, referring to the UAE-Iran territorial dispute. "We are part of the Gulf Cooperation Council and at the same time we hold feelings towards Iran of appreciation, love and continuous hope that our future will be better than our past."

Relations between Saudi Arabia and Iran were very tense between 1979, the year of the Iranian revolution, and 1997, which saw the election of the moderate cleric Mohammed Khatami as Iran's president.

Mr Shamkhani said Iran wanted to improve relations with all Arab countries.

Security pacts

Mr Shamkhani, is expected to meet Saudi Arabia's King Fahd, while the high-level delegation, including navy commander Abbas Mohtaq and senior commanders of the Pasdaran, the elite Revolutionary Guards, will visit Saudi military bases.

Tehran is known to want to sign defence pacts with its Gulf neighbours, but co-operation is difficult because it opposes the deployment of US and Western forces in the region.

President Khatami: policy of Gulf detente

Prince Sultan said the interior ministers of both countries - the Gulf's two main powers - would soon discuss a security co-operation pact focusing on crime and drugs trafficking.

Gulf officials have said that such pacts - with Oman and Kuwait - are unlikely to lead to defence accords.

A commentary on Iranian radio said the US had expressed concern over the expansion of ties between the Iranian and Saudi governments.

"Saudi Arabia's increasing vigilance in understanding the negative consequences of adhering to the US policies has been very much effective in the current developments," the commentary said.

The dispute over the islands of Abu Musa and Greater and Lesser Tunb, which are occupied by Iran but claimed by UAE, have dominated cross-Gulf dialogue.

In what has been seen as UAE's irritation at the rapprochement between Iran and Saudi Arabia, the Emirates last week reopened its embassy in Baghdad which has been closed since the Iraqi invasion of Kuwait in 1990.