“Low-profile exchanges” between Iran and Bahrain, intended to re-establish diplomatic relations between the countries that were severed in 2016, were revealed on Tuesday.

There is mutual confidence that agreement will be reached and announced imminently. Well-placed sources say that talks have been progressing for months, but the parties only broke cover to leak optimistic noises this week.

The timing is no mystery, coming hot on the heels of a much more consequential agreement between the region’s two leading powers.

On 10 March, Iran and Saudi Arabia signed an agreement, brokered by China, declaring their intention to end a hugely destructive rivalry that has stretched over decades and fuelled conflicts across the Middle East.

“The Kingdom hopes to open a new page with Iran and enhance cooperation,” said Saudi Foreign Minister Prince Faisal Bin Farhan al-Saud on Tuesday. He added that the agreement would benefit “security and stability and advancing development and prosperity not only in the two countries but in the region as a whole.”

Iranian media reported that direct flights to Saudi Arabia would soon be restored, with the first tickets already on sale.

In the next two months, the two countries will take tentative steps towards rebuilding relations that have only intermittently emerged from the deep freeze since Iran’s Islamic Revolution of 1979. Shuttered embassies are to reopen, and both sides have committed to non-interference in the other’s affairs.

The agreement coincides with a flurry of peacemaking across a region that has been plagued by conflict. While Iran is restoring ties with Bahrain – having done the same with the UAE last year – Saudi Arabia’s rulers have reached a truce to end fighting with Houthis in Yemen, and moved to repair relations with Turkey that were damaged by the murder of Jamal Khashoggi.

Syria’s President Bashar al-Assad has used the tragedy of the recent earthquake to attempt to shed pariah status earned by his regime’s brutality over an 11-year civil war, with Egypt and Saudi Arabia softening their positions amid suggestions that Syria could be readmitted to the Arab League.

Of all these developments, the agreement between Iran and Saudi Arabia is the most significant. The countries are on opposite sides of conflicts in Yemen, Syria, and Iraq and have the power to curtail them.

TOPSHOT - Smoke billows from an oil storage facility in Saudi Arabia's Red Sea coastal city of Jeddah on March 25, 2022. - Yemeni rebels said they attacked a Saudi Aramco oil facility in Jeddah as part of a wave of drone and missile assaults today as a huge cloud of smoke was seen near the Formula One venue in the city. (Photo by ANDREJ ISAKOVIC / AFP) (Photo by ANDREJ ISAKOVIC/AFP via Getty Images)
The aftermath of a Houthi drone attack in the Saudi city of Jeddah last year (Photo: AFP/Getty)

Dina Esfandiary, a Middle East specialist at Brussels-based conflict consultancy, Crisis Group, suggests harmony between the powers could be transformative.

“If it really signals the beginning of an actual conversation between these countries – and potentially all of the Gulf states and Iran – that has the potential to fundamentally alter regional security,” she says.

While both sides have emphasised that expectations will start low, the analyst and author suspects that informally, there may be understandings such as Iran using its leverage over the Houthis to facilitate a lasting peace in Yemen.

Both have strong incentives to lower temperatures. Iran has been destabilised by the nationwide protests that followed the death of Mahsa Amini, and continues to suffer under sanctions after former Donald Trump withdrew the US from the JCPOA nuclear deal.

Saudi Arabia has been disappointed by the response of Western patrons to Houthi attacks on its soil, and is pressing ahead with plans to open up to tourism and foreign investment under the ambitious leadership of Crown Prince Mohammed bin Salman.

“They both have a lot on their plates,” says Ms Esfandiary about Iran and Saudi Arabia. “This tension between them is an unnecessary constraint on their ability to conduct the foreign policy they want and then deal with their domestic issues.”

(FILES) This file UGC image posted on Twitter reportedly on October 26, 2022 shows an unveiled woman standing on top of a vehicle as thousands make their way towards Aichi cemetery in Saqez, Mahsa Amini's home town in the western Iranian province of Kurdistan, to mark 40 days since her death, defying heightened security measures as part of a bloody crackdown on women-led protests. - A wave of unrest has rocked Iran since 22-year-old Amini died on September 16 following her arrest by the morality police in Tehran for allegedly breaching the country's strict rules on hijab headscarves and modest clothing. (Photo by UGC / AFP) / === RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT "AFP PHOTO / UGC IMAGE" - NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS FROM ALTERNATIVE SOURCES, AFP IS NOT RESPONSIBLE FOR ANY DIGITAL ALTERATIONS TO THE PICTURE'S EDITORIAL CONTENT, DATE AND LOCATION WHICH CANNOT BE INDEPENDENTLY VERIFIED === / TO GO WITH AFP STORY by Vanessa CARRONNIER (Photo by -/UGC/AFP via Getty Images)
Iran has been shaken by a wave of protests following the killing of Mahsa Amini (Photo: AFP/Getty)

The agreement is also widely viewed as a riposte to the US and its partners, with Beijing stepping into Washington’s traditional role as mediator in the region.

With US-Iran relations at a low ebb following the collapse of the nuclear deal, and the US-Saudi alliance imperilled by issues such as human rights, Jamal Khashoggi, and oil production, China has taken the opportunity to demonstrate that its geopolitical rival is no longer the only game in town.

“This is an agreement that the US could not have brokered,” says Omar H Rahman of the Middle East Council on Global Affairs. “Among outside powers, only China has the clout and trust of both sides, and it has remained largely aloof from their political squabbles.”

“The Saudis and Emiratis have both moved ahead on their own with reestablishing ties to Iran because they do not believe they can rely on the US for their security,” Mr Rahman added. “Their best option is to come to terms on detente with Iran rather than allowing tensions to keep building and hoping the US will come to their aid if there is war.”

The agreement has been largely welcomed around the world, including the US, but in Israel it has been painted as a disaster. “A serious and dangerous development,” said former Prime Minister Naftali Bennett, and “a resounding failure of the Netanyahu government.”

The development is being characterised in Israel as a blow to the progress of the Abraham Accords – Saudi Arabia was thought to be close to joining – and of forming an alliance against Iran.

There is little prospect of detente between Iran and Israel, with drone attacks in Isfahan and on Israeli ships in recent months, and escalation between them is one of several challenges to embryonic Saudi-Iran relations. Riyadh must strike a delicate balance to avoid burning bridges with either or both.

There are further minefields on the path ahead. Iran and Saudi Arabia are in economic competition as leading oil exporters, which could become increasingly cut-throat with prices falling. Yemen’s Houthis have said they are not accountable to Tehran, and could torpedo any peace deal.

There is a risk of local grievances in war-torn countries such as Yemen and Syria being overlooked in the charge for wider regional agreements, suggests Ms Esfandiary, leaving them with cold peace but no justice.

But in the short term at least, it is agreements rather than conflicts that are escalating in the Middle East.

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