The agreement was signed after two days of talks in Damascus involving the visiting Iraqi oil minister, Amer Rashid.

It will not take immediate effect. The pipeline has been disused for the past 16 years, and rehabilitation work is expected to take several months.

Iraqi minister, Amer Rashid , negotiated the pipeline deal

Mr Rashid said no new permissions would be needed from the United Nations under the sanctions regime.

He said Iraq had already listed Syrian outlets along with others when arrangements were reached in 1996 allowing Iraq to sell limited amounts of oil to finance purchases of food and medicines.

But oil industry experts say the UN did not in fact approve the Syrian outlets, so permissions will be needed for that and for the financing and equipment needed to rehabilitate the pipeline.

Iraq does not actually need the extra export capacity at the moment, since its existing routes through Turkey and the Gulf are more than sufficient, but it has been pressing for some time for the reopening of the line. No doubt it has long-term export plans in mind.

The agreement also calls for the construction of a second new pipeline to the Syrian coast.

But the agreement is also politically significant, signalling a further warming of ties between the two long-estranged countries.

They are ruled by rival wings of the Baath party, and relations foundered in the early 1980s when Syria sided with Iran in its war with Iraq.

But a cautious thaw began last year, though it has been officially confined to economic matters.