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By Waleed Ibrahim

BAGHDAD, June 5 (Reuters) - The United Arab Emirates said on Thursday it would name an ambassador to Baghdad within days, a step that eases Iraq's diplomatic isolation in the Arab world.

No ambassador from any Arab country has been stationed permanently in Baghdad since Egypt's envoy was kidnapped and killed shortly after arriving in 2005.

In the first visit by a Gulf Arab foreign minister since the U.S.-led invasion in 2003, Sheikh Abdullah bin Zayed al-Nahayan said Arab states had let Iraq down during years of hardship.

"I believe Iraq should be encouraged by his brothers. I should be clear and honest, Iraq suffered from being discouraged by its (Arab) brothers over the past years," he told a news conference after meeting his Iraqi counterpart Hoshiyar Zebari.

The UAE withdrew its charge d'affaires, its top envoy in Iraq, in May 2006 after one of its diplomats was kidnapped and held for nearly two weeks by Islamist militants. It has maintained only low-level representation in Iraq since.

"The Emirates will send an ambassador to Iraq and we wish to finalise the talks with the government of Iraq to name the ambassador in the next few days," Sheikh Abdullah said.

"I hope in the coming few weeks to see an active United Arab Emirates embassy in Baghdad," he said.

Analysts say Baghdad's reliance on U.S. and other foreign troops and its close ties with non-Arab, Shi'ite majority Iran may also lie behind the reluctance by Sunni Arab states to normalise ties. Iraq is the only Shi'ite-led Arab country.

Iraq's government welcomed the UAE's decision as an important step by Arab countries to re-engage with Iraq.

Prime Minister Nuri al-Maliki, in a statement, praised the UAE's "efforts to enhance diplomatic Arab representation in Iraq".

Zebari said Jordan was also planning to name an ambassador to Baghdad.

Improved ties with Gulf Arab states could increase Iraq's chances of persuading two of its biggest creditors, Saudi Arabia and Kuwait, to cancel Baghdad's debts.

Iraq's debt to the Gulf Cooperation Council, which comprises Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the UAE, stands at $32.4-$55.4 billion.

Oil powerhouse Saudi Arabia, the region's most influential country, wants Maliki's government to reach out politically to Sunnis, which ruled Iraq under former President Saddam Hussein but have complained of being marginalised in the new Iraq.

Maliki plans to visit the UAE and Iraq's debt to the country will be discussed, government spokesman Ali al-Dabbagh said.

Only Syria and Jordan have sent foreign ministers to Iraq since the 2003 war which toppled Saddam Hussein. (Reporting by Khalid al-Ansary and Aseel Kami in Baghdad, and Lin Noueihed in Dubai; Writing by Michael Georgy)

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