Iran said the latest round of talks with Saudi Arabia was "positive and serious."
"The fifth round of talks between Saudi Arabia and Tehran were held in Iraq, and the talks were progressive and positive," spokesman Saeed Khatibzadeh told a televised weekly news conference.
However, he noted that a meeting for their foreign ministers is not yet on the cards.
An Iraqi government official had previously confirmed that Riyadh and Tehran held the fifth round of talks to improve the severed ties between the two countries.
Khatibzadeh said that the officials agreed to hold a subsequent round of negotiations without specifying a date.
Agence-France Presse (AFP) quoted Khatibzadeh saying that "if the negotiations are upgraded to a first-class political level, it can be expected that progress can be made swiftly in different sectors of the talks."
Riyadh has severed diplomatic relations with Tehran since January 2016 after the attack on the Saudi embassy in the Iranian capital and its consulate in Mashhad.
Saudi Arabia rejects Iranian interference in the affairs of Arab countries, including Syria, Iraq, Lebanon, and Yemen, and the development of its nuclear program.
During the past year, four dialogue rounds were held in Iraq, sponsored by Prime Minister Mustafa al-Kadhimi, aiming to improve ties.
The Iranian government, which is suffering from a stifling economic crisis due to US sanctions, pledged to end Tehran's regional isolation.
Iran's relations with the regional countries recently became an issue of public opinion in the country.
Nour News Agency, affiliated with Iran's Supreme National Security Council, expressed optimism about the talks held between high-level representatives and expected a joint meeting at the level of foreign ministers soon.
The official Iraqi newspaper Assabah quoted an unnamed Iranian source as saying that the latest round of talks set a roadmap for the meetings and relations between Riyadh and Tehran, which increases hopes of restoring the diplomatic ties soon.
The newspaper quoted an Iranian parliamentary spokesman as saying that improving relations between Saudi Arabia and Iran will positively impact the countries and peoples of the region on the political, cultural, and economic levels.
