The Saudi monarch has invited the Iranian president to an extraordinary summit of Muslim leaders to be held this month in the city of Mecca, according to the state news agency SPA.
King Abdullah bin Abdulaziz Al Saud "sent a written letter to President Mahmoud Ahmadinejad inviting him to attend the extraordinary Islamic solidarity meeting which will be held in Mecca" in mid-August, SPA reported on Sunday.
Saudi Arabia called last month for the summit in an effort at "unifying the ranks" of Muslims.
The headquarters of the 57-member pan-Muslim body - the Organisation of Islamic Co-operation - is located in the Red Sea city of Jeddah in Saudi Arabia.
Tensions have been running high between the Sunni-dominated Saudi Arabia and Shia Islamic Iran as both regional powers have taken opposite stances on the uprisings in Bahrain and Syria.
Iran had voiced support for a Shia-led uprising in Bahrain. Along with other Gulf Arab states, Saudi Arabia sent troops to Bahrain to crush the uprising last year.
Confrontations have also intensified recently within Saudi Arabia between police and marginalised Shia citizens.
The Shia population is estimated at about two million and mostly concentrated in the Eastern Province.
Two Shia protesters were killed last month, triggering attacks on government buildings in Qatif.
The Saudis have previously called for arming Syrian rebels against the forces of President Bashar al-Assad - who belongs to the Alawi minority, an offshoot of Shia Islam - while Iran has been repeatedly accused of sending military aid to the Syrian government.
Iran has denied the claims.