Egypt and Iran are in talks to reestablish diplomatic relations and start developing bilateral cooperation in all areas, an Egyptian newspaper said on Monday.
Al-Ahram daily cited an Iranian envoy to Egypt as saying that new Egyptian authorities had expressed a willingness to open a new page in bilateral relations and Tehran had "immediately and positively" reacted to this initiative.
Iran severed diplomatic ties with Egypt in 1980 when Cairo signed a peace treaty with Tel Aviv.
Bilateral relations deteriorated remarkably during Iranian President Ahmadinejad's time in the office, as both countries exchanged incrimination's of spying in addition to Egypt accusing Iran of smuggling weapons to Hamas in Gaza and destabilizing Egypt's national security.
However, relations have shown signs of improvement since the ouster of Egyptian President Hosni Mubarak in a popular uprising in February.
Egypt, which is currently run by an army-led transition government, has recently allowed two Iranian warships to travel through the Suez Canal in the first such passage since Iran's 1979 Islamic revolution and despite strong objections from Israel.