Prime Minister Anwar Ibrahim has been urged to abandon the policy in light of recent developments in Gaza.

This comes as the US appears to make progress in brokering a normalisation deal between Israel and Saudi Arabia.

US officials usually impose export controls for national security reasons.

A ceremony was held inside the embassy's compound with dozens of diplomats and officials attending the reopening of the diplomatic mission for the first time in seven years.

The summit in Saudi Arabia comes at a time when the world's biggest oil exporter is flexing its diplomatic muscle across the Middle East and beyond.

With the war far from over and Assad still internationally isolated, analysts say sanctions will likely continue to deter investment.

The visit comes just weeks after Iran's landmark agreement to restore ties with regional rival Saudi Arabia and amid a flurry of diplomacy in the Middle East as regional relations with Iran and Syria shift.

Any recommendation to reinstate Syria to the 22-member Arab League, whose next meeting is due to be held in Saudi Arabia next month, is likely to draw protests from Western capitals.

With Iran's president also expected in Saudi soon, and the Saudis negotiating with Yemen's Huthi rebels this week in an attempt to end fighting there, optimism has blossomed for the turbulent Gulf region.

Iranian Foreign Minister Hossein Amir-Abdollahian and his Saudi counterpart Prince Faisal bin Farhan discussed steps towards reopening the embassies and consulates of the two countries, reports say.

Earlier this month, Iran and Saudi Arabia agreed to revive relations after years of hostility that had threatened stability and security in the Gulf and helped fuel conflicts in the Middle East from Yemen to Syria.

The oil-rich country remains traumatised from the years of war, occupation and bloody sectarian turmoil that followed the operation launched on March 20, 2003.