By Michelle Moghtader DUBAI (Reuters) - For decades the opposing poles of Middle East power politics, Saudi Arabia and Iran may be driven to set aside at least some of their differences by the rise of a mutual enemy: Islamic State. The Sunni militant group is as hateful to Tehran for its threat to the rule of Iran's Shi'ite allies in neighbouring Iraq and Syria as it is to Saudi Arabia for its pursuit of fundamentalist theocratic rule in an Islamic caliphate. "We are aware of the importance and sensitivity of this crisis and the opportunity we have ahead of us," Saudi Foreign Minister said after meeting his Iranian counterpart Mohammad Javad Zarif in New York on Sunday, according to the Iranian state news agency IRNA. "We believe that by using this precious opportunity and avoid the mistakes of the past, we can deal with this crisis successfully." It was the highest-level meeting between the two countries since the election of the pragmatic Hassan Rouhani as Iranian president last year. Zarif also sounded upbeat, saying: "Both my Saudi counterpart and I believe that this meeting will be the first page of a new chapter in our two countries' relations," according to IRNA. "We hope that this new chapter will be effective in establishing regional and global peace and security and will safeguard the interests of Muslim nations across the world." There were first hints of detente last month when both countries welcomed the appointment of Haidar al-Abadi as Iraq's prime minister after Islamic State's lightning advance across northern Iraq forced his predecessor Nouri al-Maliki from power. Maliki was close to Iran, where he had spent years in exile while Saddam Hussein maintained Sunni rule in Iraq, but was accused by his opponents of ruling for the Shi'ites only -- breeding resentment and rebellion among the Sunni minority, and paving the way for IS to threaten the survival of the state. THORN REMOVED Once Iran came to see Maliki as too divisive and withdrew its backing, it removed a thorn in relations with Riyadh. Soon after, Iranian Deputy Foreign Minister Hossein Amir Abdollahian met Prince Saud in Jeddah for what he called "constructive" talks about Islamic State and Israel's attack on Gaza, and spoke of "opening a new page" in relations. And a week ago, Riyadh said it planned to reopen its embassy in Baghdad after two decades. But there is much mutual suspicion -- and competing interests -- to overcome. Iranian leaders see Riyadh as a stooge for their American foes, and remain angry at Saudi Arabia's backing for Iraq during its eight-year war with Iran in the 1980s. Saudi Arabia's ruling princes for their part fear that Iran's clerical elite remains determined to export the message of its 1979 Islamic Revolution to Shi'ites across the Middle East, not least to Lebanon or the wealthy Sunni-ruled monarchies of the Gulf. Riyadh sees the sudden advance of Shi'ite Houthi rebels in Saudi Arabia's impoverished neighbour Yemen over the past week as evidence of such efforts. Saudi Arabia has also backed mostly Sunni Syrian rebels fighting Iran's ally, President Bashar al-Assad, whose establishment belong to an offshoot of Shi'ite Islam, and both Riyadh and Tehran have accused each other of fuelling the bloodshed. Nonetheless, Rouhani, seen as on the pragmatic wing of Tehran's clerical leadership, pledged after his election to improve ties with Iran's Gulf Arab neighbours as well as the West. Iran's tone has been far less confrontational than under his predecessor, but overcoming decades of suspicion will take more than a meeting of foreign ministers. "It's a good sign that they met, and maybe through Iraq there can be a bit of movement on Saudi-Iranian relations," said Mohammed al-Zulfa, a former member of the Saudi Shoura Council, appointed by King Abdullah to advise the government on policy. "But ... we will have to wait and see if they really arranged something in this meeting in New York." (Reporting by William Maclean and Michelle Moghtader in Dubai and Angus McDowall in Riyadh; Editing by Kevin Liffey)
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