Saudi Arabia (search) is restoring diplomatic relations with Iraq, a Saudi official said Wednesday.

"We have decided to reopen our embassies," said the official who spoke on condition of anonymity. "There have been no diplomatic relations since the [Iraqi] invasion of Kuwait in August of 1990."

The disclosure coincides with a visit to Jeddah by U.S. Secretary of State Colin Powell (search), who will meet Thursday with interim Iraqi Prime Minister Ayad Allawi (search).

Earlier this month Iraq announced the appointment of 43 ambassadors in a sign Allawi's government was re-engaging with the world. But Kuwait and Saudi Arabia were not on the list.

Foreign Minister Hoshyar Zebari said at the time Iraq had recently received "good and positive signs" that diplomatic ties would soon be resumed with these neighbors.