JEDDAH, Saudi Arabia — Saudi Arabia announced yesterday that it has begun talks with Iraq about opening an embassy, a move that could be a major boost to American diplomacy and reconciliation efforts. The Sunni-led kingdom has long resisted such a formal step, which would bolster the Shiite-dominated government in Baghdad and signal to Iraq’s minority Sunnis that their prospects of returning to power are over.

After talks with Secretary of State Rice and Defense Secretary Gates, Saudi Foreign Minister Saud al-Faisal also said the kingdom was prepared to seriously consider participating in the international meeting President Bush announced last month to push for Arab-Israeli peace. Saudi participation is widely considered essential for any American-orchestrated meeting to be considered legitimate in the Arab world, since Saudi Arabia is the author of the Arab League peace initiative as well as the guardian of the Islamic world.

“We are interested in a peace conference that deals with substantive matters of peace, issues of real substance, not nonsubstantive issues,” Mr. Faisal said. “If that does so, that becomes of great interest to Saudi Arabia. … We would look very closely and very hard at attending.”

The conditional Saudi acceptance will force the American officials to ensure that the meeting is more than what Mr. Faisal called a “photo opportunity.” The Arab world has been highly skeptical of the Bush administration’s commitment, given repeated pledges to jumpstart the moribund peace process, and its energy with only 18 months left in office.

The underlying tensions between America and Saudi Arabia were still evident during the Rice-Gates visit, as the Saudi foreign minister expressed anger at recent public criticism from Washington’s ambassador to the United Nations, Zalmay Khalilzad, that the oil-rich kingdom was not doing enough to help with reconciliation in Iraq.