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Iran and Saudi Arabia agreed to reopen their diplomatic missions and boost economic cooperation during a meeting in the Chinese capital on Thursday, a significant step forward for the two regional rivals seven years after they broke off relations, the Associated Press reported.

Both sides said they would open their embassies and consulates in the future, adding that they are also looking into resuming flights and official and private visits between the two nations.

Iran and Saudi Arabia also affirmed the need for regional stability, a statement that could potentially reduce the chance of armed conflict between the rivals – both directly or through proxies, as is the case in Yemen.

The meeting in Beijing came a month after China had brokered an initial reconciliation agreement between the regional powerhouses. China, meanwhile, said it was ready to support both sides in improving relations and urged the international community to help also.

Thursday’s talks mark the first formal meeting between senior diplomats of the two countries since 2016, having severed ties that year after protestors in Iran attacked Saudi diplomatic outposts in response to the Saudi government’s execution of a prominent Shiite religious leader and 46 others. Iran is predominately Shiite while Saudi Arabia is a majority Sunni nation.

Analysts said that the agreement could encourage efforts by diplomats to end Yemen’s long civil war, a conflict that has involved both Iran and Saudi Arabia.

Others added that the meeting also underscores a diplomatic victory for Beijing as Gulf Arab states perceive the United States as slowly withdrawing from the region.

Even so, US officials noted that the success of rapprochement might hinge on the progress of peace negotiations in Yemen, where Saudi Arabia has been fighting Iran-backed Houthi rebels since 2015.

Additionally, Saudi Arabia remains wary of Iran’s nuclear program, which has progressed significantly after the US withdrew from the 2015 agreement to limit Iran’s atomic activities.

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