The Kuwaiti Foreign Minister (L) met his Iraqi counterpart on the 18th anniversary of Kuwait's liberation
Kuwait's foreign minister has flown to Iraq for the highest-level visit since Iraq's armed forces invaded its southern neighbour in 1990.
Sheikh Muhammad al-Sabah, who is also Kuwait's deputy prime minister, met Iraq's PM and other top officials.
They discussed joint oilfields, maritime borders and war reparations, exactly 19 years after Iraqi forces were expelled from Kuwait.
Iraqi officials said it was "illogical" to continue paying Kuwait compensation.
Many countries have written off their debts to help Iraq get back on its feet since the overthrow of Saddam Hussein by a US-led invasion in 2003.
However Kuwait, which has so far received $13.3bn in compensation from Iraq, is holding out for more. Iraq currently pays 5% of its oil revenues as compensation to Kuwait.
Iraqi Foreign Minister Hoshyar Zebari said the Kuwaiti parliament, and not their government, shown to decide on the matter.
The Iraqi Foreign Minister and Kuwaiti ambassador cut a cake at the celebratory banquet
On Wednesday night, Kuwait celebrated its liberation for the first time at a banquet in their Baghdad embassy.
Kuwait's first ambassador to Iraq since the 1990-91 war, Ali al-Momen, said: "It means a great deal to me, to my people, to my leadership, having this celebration on this land."
"We have a great task ahead of us and we will work very hard," he added.
Iraqi President Jalal Talabani visited Kuwait in January for an Arab economic summit.