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Iran and Saudi Arabia agreed to reestablish diplomatic relations following Chinese-led negotiations, a landmark development that many analysts see as a de-escalation of tensions in the Middle East and Beijing’s increasing international role, CNBC reported.

The two regional rivals made the announcement Friday following four days of negotiations in Beijing. They agreed to reopen their embassies and diplomatic missions in each other’s countries.

The new agreement will also include the revival of previous cooperation accords, including the 1998 “General Agreement for Cooperation” covering the fields of trade, economy, technology, science, culture and youth.

Iran and Saudi Arabia had long accused one another of destabilizing the region. In 2016, they severed relations after Iranian protesters stormed the Saudi embassy in Tehran following Riyadh’s decision to execute 47 dissidents, including a prominent Shia cleric.

Gulf nations and the United States – Riyadh’s ally and Tehran’s rival – welcomed the resumption of diplomatic relations.

Analysts, meanwhile, described the agreement as a major breakthrough for the region, noting that it could lead to positive developments in war-torn Yemen – where Iran-backed militias are fighting the internationally recognized government supported by a Saudi-led coalition.

Others noted that the deal also underscores China’s growing role in resolving foreign disputes, according to the Wall Street Journal.

They explained that the unexpected event serves as a reminder to Washington that, despite the US’ long role and military presence in the Middle East, China is a rising economic and diplomatic influence there.

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