The decision comes little more than a year after the two countries recalled their respective envoys after a row erupted when Baghdad accused Damascus of harbouring the masterminds of devastating attacks in the Iraqi capital.

Iraq noted on Friday that a request for the transfer of two men it said last year were behind the bombings, and being sheltered in Syria, was still pending.

"I met the Syrian foreign minister to inform him that the Iraqi government has decided to restore full diplomatic relations by sending back our ambassador to Damascus," Zebari said by telephone from New York, where he is attending the United Nations General Assembly.

"The Syrian side welcomed that and agreed to send their ambassador to Baghdad as soon as possible."

The neighbours' tit-for-tat recall of envoys on August 25, 2009 came six days after massive truck bombings against the ministries of finance and foreign affairs in Baghdad left 95 dead and around 600 wounded, the worst day of violence in Iraq in 18 months.

Iraq accused Syria of sheltering two insurgents, Mohammed Yunis al-Ahmed and Sattam Farhan, who orchestrated the attacks, charges Damascus denied.

Baghdad's government spokesman Ali al-Dabbagh said on Friday that the request for the two men was still pending, but Iraq believed "relations need to develop with good will from both sides."

"The request (for the two men) is still there," he told AFP, adding that the Iraqi cabinet had decided to restore full diplomatic ties on Tuesday.

"There is no connection between our relations and that request. We do not want to impose that issue along with the relations."

Dabbagh added that Baghdad wanted to boost economic ties with Damascus, after the two sides agreed on Monday to build two oil pipelines linking Iraq to Mediterranean sea ports, via Syria, for exporting crude.

The diplomatic flap had thrown into disarray extensive efforts made in the previous years to boost ties, which had been weak under former Iraqi dictator Saddam Hussein.

The two countries held failed, Turkish-mediated talks, talks in the aftermath of the row.

Prime Minister Nuri al-Maliki alleged last year that 90 percent of foreign "terrorists" who infiltrate Iraq did so via Syria.

Iraq aired a video showing a former police chief confessing to the bombing at the finance ministry and saying he had received orders from Syria-based Baathist bosses.

Diplomatic relations between Damascus and Baghdad were severed in 1980 when the countries were ruled by rival wings of the Baath party and Syria backed Iran in a devastating war with Iraq that broke out that year.

Relations started to thaw in 2000 and the two nations decided in 2006 to resume formal ties, three years after the invasion. Iraq's first ambassador to Syria for nearly 30 years arrived in Damascus to start work in February 2009.

In April 2009, Prime Minister Mohammed Naji Otri made the first trip by a Syrian premier to Iraq since the invasion.

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