KUWAIT CITY (AFP, REUTERS) - Saudi Arabia will reopen its borders and airspace to Qatar, Kuwait's foreign minister said on Monday (Jan 4), a major step towards ending a diplomatic rift that has seen Riyadh lead an alliance isolating Doha.

The bombshell announcement came on the eve of the six-nation Gulf Cooperation Council (GCC) annual summit in the northwestern Saudi Arabian city of Al-Ula, where the dispute was already set to top the agenda.

In another sign the three and a half year spat was nearing resolution, the office of Qatari Emir Sheikh Tamim bin Hamad Al-Thani said that he would attend, after he skipped the annual meetings for the last three years.

Riyadh led a coalition of countries in the Gulf and beyond that cut ties with Doha in June 2017, charging that it was too close to Teheran and backed radical Islamist groups - allegations that Qatar has always denied.

Washington has intensified pressure for a resolution to what Doha calls a "blockade", insisting Gulf unity is necessary to isolate US nemesis Iran as the curtain falls on Donald Trump's presidency.

Kuwaiti Foreign Minister Ahmad Nasser Al-Sabah announced on state TV that "it was agreed to open the airspace and land and sea borders between the Kingdom of Saudi Arabia and the State of Qatar, starting from this evening."

He noted that the agreement was based on a proposal by Kuwaiti emir Sheikh Nawaf al-Ahmad Al-Sabah, reflecting the nation's repeated efforts to mediate in the crisis.

Drivers in south Doha on the usually calm Salwa highway towards the Saudi border at Abu Samra sounded their horns and waved their arms from their car windows in the wake of the announcement, an AFP correspondent saw.

Regional analyst Michael Stephens, however, said there was still work to be done to bridge the wider divisions between Qatar and its regional rivals.

"I don't think anything has been agreed. It's positive news though. A big step, and the important first step," he told AFP.

The GCC is a bloc that consists of boycotting countries Saudi Arabia, the United Arab Emirates and Bahrain, neutral Kuwait and Oman, and Qatar.

White House senior adviser Jared Kushner, assigned to work on the dispute by President Trump, helped negotiate the deal and was working the phones on it until the wee hours of Monday morning, a senior Trump administration official said.

Kushner, Middle East envoy Avi Berkowitz and Brian Hook, a special State Department adviser, were flying to the Saudi Arabian city of al-Ula to attend the signing ceremony, the U.S. official said.

If the deal holds, the Gulf dispute will be added to a string of diplomatic achievements of the Kushner team, a list that includes normalisation deals last year between Israel and the United Arab Emirates, Bahrain, Sudan and Morocco.

Kushner, who is also Trump's son-in-law, has been working on more normalization deals between Israel and Arab countries but might run out of time with President-elect Joe Biden due to take over the presidency on Jan 20.

The development is the latest in a series of Middle East deals sought by Washington - the others involving Israel and Arab states - aimed at building a united front against Iran.

Saudi state agency SPA quoted Saudi Arabia's de facto ruler Crown Prince Mohammed bin Salman as saying the annual gathering of Gulf leaders would unite Gulf ranks "in the face of challenges facing the region".

The US official said the Saudi crown prince and Qatari emir would sign the deal.

Diplomatic freeze

The Saudi-led GCC hawks, along with Egypt, in 2017 closed airspace to Qatari planes, sealed borders and ports, and expelled Qatari citizens.

An information battle raged online with the two camps trading allegations and barbs, deepening the enmity.

Observers have warned that the UAE could be the spoiler for regional reconciliation attempts, having heaped criticism on Qatar and its leadership since the spat erupted.

The diplomatic freeze has only served to make Qatar more self-sufficient and push it closer to Iran, observers say. It has also hurt Saudi strategic interests.

Analysts say that Riyadh lifting the ban on Qatar using its airspace, borders, and waterways could have been at the insistence of Doha before agreeing to send the emir to the summit.

Any rapprochement at the summit may prove to be preliminary, analysts and diplomats had said, and few expected a comprehensive resolution to the row.

At the start of the crisis, the boycotting countries issued a list of 13 demands to Doha, including the closure of pan-Arab satellite television channel Al Jazeera, undertakings on "terror" financing, and the shuttering of a Turkish military base in Qatar.

Qatar has not publicly bowed to any of the demands.

US national security adviser Robert O'Brien had said in November that allowing Qatari planes to fly over Saudi Arabia via an "air bridge" was a priority for the Trump administration.

Iranian media has said that Qatar has been paying in excess of US$100 million (S$130 million) annually to use Teheran's airspace to bypass Saudi.

In return, analysts have suggested Qatar could agree to tone down the coverage of Saudi Arabia by its media, including by Al Jazeera.