Saudi Arabia and Iran have agreed to exchange the ambassadorships of the two countries in the Gulf state, according to Saudi media.

The Saudi Press Agency reported that the move was made on Friday.

“The announcement was made by the Iranian ambassador to Saudi Arabia at a meeting in Riyadh,” the Saudi-owned newspaper said.

It added that the two sides were seeking to establish “mutual trust”.

“Iran is a major power in the region and its relations with Saudi Arabia have been strained in the past years,” the report said.

“It has been the source of discord between the two governments, but now the two leaders are keen to restore diplomatic relations.”

Saudi Arabia is the US’ biggest arms customer.

Iran is the UAE’s second-largest arms customer after the US.

Saudi Arabia has also been accused of blocking attempts by Iran to negotiate a new oil contract, which would see it receive billions of dollars in revenue.

Iran denies the accusation.

The UAE has a large number of US military personnel and has a strong military presence in the kingdom.

Saudi and Iranian officials have previously said they have no interest in fighting each other in the Middle East.

“We are seeking to promote mutual understanding,” the Saudis foreign minister, Adel al-Jubeir, told Al Jazeera in an interview on Thursday.

“I hope that in the future, the two presidents will work on the joint agenda to achieve a better future for the region,” he said.