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Both countries will appoint charge d'affaires and discuss further thaw, two years after embassies shuttered.
Tensions rise in standoff that has the potential to prompt military reprisals and push up global oil prices.
Vice-president threatens to cut off shipments at Strait of Hormuz if West sanctions Iran's vital oil exports.
There were no casualties in the blast early on Sunday, say Bahraini and British officials.
UK government expels Iranian embassy staff in London following an attack on the British embassy in Tehran.
The storming of the British embassy in Tehran is part of a wider political game playing out in the Islamic Republic.
Iranian ambassadors summoned after suggestion British embassy staff may face trial.
Iran has boosted security around the British embassy in Tehran after British diplomats said a petrol bomb was thrown at the embassy compound.
A British embassy residential compound in Tehran has been fired at in the third shooting attack on the UK diplomatic presence this month.
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