King Abdullah ordered on Friday the reopening of the Saudi mission in Egypt after it was shut last week in the wake of angry protests, defusing a rare crisis between the two Arab heavyweights.
The SPA state news agency, quoting an unnamed official, said the king "instructed the kingdom's ambassador to Cairo to resume his post on Sunday, and ordered the reopening of the embassy and the consulates in Alexandria and Suez."
The decision was announced after the monarch received a top ranking Egyptian delegation, a day after it arrived in the kingdom on a mission to defuse tension between Cairo and Riyadh.
Saudi Arabia recalled its ambassador on Saturday after angry protests broke out outside its Cairo embassy following the arrest in the kingdom of an Egyptian human rights lawyer. Riyadh claimed he was in possession of drugs.
King Abdullah told the delegation the recent deterioration in ties was "painful to every honest Saudi and Egyptian citizen," and the kingdom's decision to shut its embassy "was only to protect its staff."
He welcomed the Egyptian delegation's visit, saying that with "such an honourable position I can only say that we shall not allow this passing crisis to last long."
The monarch also urged "Egyptian and Saudi media to take an honourable stance, and to speak good or shut up," clearly alluding to fierce campaigns waged in both countries since the crisis flared up.
The delegation is headed by Egypt's parliament speaker Saad al-Katatni and the head of the consultative council Ahmed Fahmi. It also includes Muslim and Christian clergy, political leaders and cinema stars.
Katatni and other delegation members urged the king to reopen the embassy, according to footage of the meeting broadcast on Saudi television.
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"Recalling the Saudi ambassador from Cairo is difficult for us, Egyptians. This delegation came here to stress the depth of our relation and requests you to send the ambassador back to Cairo on the same plane with us," Katatni said.
Saudi Foreign Minister Prince Saud al-Faisal told the delegation that Riyadh does not rule out that "foreign elements" could have plotted to cause the tension between the two Arab heavyweights, SPA reported late on Thursday.
"We do not rule out that foreign elements not wanting the good for us, or Egypt, or the whole nation, could be behind disturbing the historic, solid and growing relations between our two countries and peoples," he said.
Riyadh and Cairo enjoyed strong relations during the rule of former President Hosni Mubarak, who was forced to step down in February 2011 following nationwide protests.
Last week protesters rallied outside the Saudi embassy in Cairo chanting slogans against the Saudi regime and calling for the release of lawyer Ahmed Mohammed al-Gizawi, who was arrested the previous week at Jeddah airport.
According to the Cairo-based Arabic Network for Human Rights Information, Gizawi's arrest came after he had been sentenced in absentia to a year in prison and 20 lashes for criticising the Saudi government.
Gizawi was being targeted for his activism in favour of Egyptian detainees in Saudi prisons, the group said in a statement last week, adding that he had gone to Saudi Arabia on pilgrimage to Muslim sites.
But the Saudi ambassador to Egypt, Ahmed Adel Aziz Qattan, said Gizawi was arrested when banned drugs were found in his possession, adding that he regretted the "misinformation" published in the Egyptian media.
He said in a statement issued by the Saudi embassy that Gizawi was arrested for possessing 21,380 tablets of Zanak, which is prohibited in the kingdom without medical approval.
The drugs were allegedly hidden in children's milk cartons and two copies of the Koran.