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By Mohammed Abbas

BAGHDAD, Oct 5 (Reuters) - Egyptian Foreign Minister Ahmed Aboul Gheit made an unannounced visit to Iraq on Sunday and promised to reopen an embassy in Baghdad soon, the latest sign that fellow Arab nations are slowly restoring ties.

Aboul Gheit was accompanied by Egypt's Oil Minister Sameh Fahmy in the first high-level Egyptian delegation to Iraq since al Qaeda killed Egypt's envoy to Baghdad in 2005.

Washington and Baghdad have long complained that other Arab states, mostly run by Sunni Muslims, have given the Shi'ite-led government in Baghdad the cold shoulder since the fall of Saddam Hussein, even as non-Arab Iran has increased its clout.

There has been some progress in recent months, however, with the leaders of Jordan and Lebanon making visits to Baghdad and the United Arab Emirates sending an ambassador, the first Arab envoy based in Baghdad since the slaying of the Egyptian.

Aboul Gheit and Iraqi Foreign Minister Hoshiyar Zebari told reporters at a news conference that Egypt would soon re-open its embassy in Baghdad, and that officials of both countries would hold meetings to further bolster ties.

Egypt and Iraq also plan to cooperate in energy projects and exchange expertise, they said. No deals had been signed.

"Iraq has passed through a difficult period and today we hope that we see Iraq outside this situation ... Egypt has a confirmed desire to build a strong and active Iraqi-Egyptian relationship," Aboul Gheit said.

Iraq is hoping that a dramatic reduction in violence over the past 18 months will encourage a revival in diplomatic ties with its Middle Eastern neighbours.

"Egypt's presence with us today, and it is the older sibling of all the Arab countries, will help Iraq and its government face many challenges," Zebari said.

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