Kuwait's Prime Minister arrived in Baghdad on Wednesday in the first such visit since Saddam Hussein's forces invaded the oil-rich emirate in 1990, Iraqi officials and Kuwaiti state media said.

Iraq's deputy foreign minister, Labid Abbawi, told AFP that Prime Minister Sheikh Nasser Mohammad al-Ahmad al-Sabah had arrived in the Iraqi capital, confirming a report by Kuwait's official KUNA news agency.

It is the first visit by a Kuwaiti Premier to Iraq since Sheikh Saad al-Abdullah Al-Sabah in 1989, and the first since the late dictator Saddam ordered his forces to invade Kuwait in August 1990.

The Iraqi forces were expelled from the neighbouring emirate by an international coalition seven months later.

The visit was "to congratulate Prime Minister Nuri al-Maliki on the new government, and to confirm the depth of the relations between the two countries," Abbawi said.

"It will create a great opportunity to open the road for discussions about outstanding issues between the two countries," said the deputy Iraqi diplomatic chief.

"It is also a very important political message confirming Iraq's preparations to host the coming Arab summit," which is planned for March, Abbawi added.

Maliki's new government was approved by parliament on December 21, after more than nine months of political gridlock following an inconclusive election as political groups haggled over the formation of a coalition.

The visit also comes two days after a clash between Kuwaiti coast guards and Iraqi fishermen in which a Kuwaiti was killed and an Iraqi fishing boat sunk.

Kuwait's interior ministry said the skirmish occurred when an Iraqi boat entered Kuwaiti waters and refused orders from a coast guard patrol to stop.

Dabbagh said on Tuesday that "a private Iraqi boat was fired upon by Kuwaiti coast guards, and sank. One of the members of the Kuwaiti forces was killed, and the Kuwaitis detained four Iraqis."

There are a number of outstanding issues between Iraq and Kuwait relating to the 1990 Iraqi invasion and subsequent occupation of Kuwait.

Iraq still pays five percent of revenues from its oil sales into a reparations fund for Kuwait, which is demanding that Baghdad pay another $22 billion. Kuwait has received about $13 billion in reparations.

Kuwait also demands that Iraq return property stolen during the occupation and explain the fate of hundreds of missing Kuwaitis.

In December, the emirate urged Iraq to fully apply all international resolutions and settle outstanding issues after the UN Security Council voted to end key sanctions imposed on Baghdad.

At the time, the Kuwaiti cabinet also welcomed UN Security Council resolutions to halt some sanctions imposed on Iraq after Saddam ordered his troops to invade Kuwait in 1990.

Kuwait said then that "commitment to serious and full implementation of Security Council resolutions related to the situation between Iraq and Kuwait will close all files and settle outstanding issues.

"This will also lay foundations for strong relations based on the respect of sovereignty and independence and the principle of good neighbourly relations and non-interference in internal affairs," it said.