DUBAI  - Iraq has agreed to repatriate Saudi prisoners who fought alongside Islamist insurgents against US-led forces under a deal that signals further improvement of relations between the two major Arab countries. The prisoner exchange deal comes less than a month after Saudi Arabia, which has had uneasy relations with Iraq’s Shi’ite Muslim-led government, named an ambassador to Baghdad for the first time since Saddam Hussein invaded Kuwait in 1990. It also comes ahead of an Arab summit in Baghdad on March 29 which has been delayed twice by regional turmoil and acrimony between Baghdad and some Sunni Muslim Gulf Arab states over a crackdown by Bahrain’s Sunni rulers on Shi’ite protesters.