For the last three decades diplomatic ties between Iran and Egypt have been non-existent.

Yet in a move that left many baffled, the old rivals have signed an accord agreeing to begin 28 weekly flights between the two countries.
 
Iran's semi-official Fars news agency suggested this could be the beginning of a resumption of diplomatic relations.  
 
Traditionally, the two countries have backed opposing political camps in Iraq, Lebanon and the Palestinian territory.
 
So as US sanctions on Iran begin to bite, and with Middle East talks on the brink of collapse, the agreement is raising many questions.  

Is it a strictly business deal or the beginning of a thawing of relations? And what could it mean for a region torn by competing powers?

Joining the programme are Mustafa Ellabbad, the director of Al-Sharq Center for Regional and Strategic Studies, Sadegh Zibakalam, a professor of politics at Tehran Univeristy, and Khalil Jahshan, a Middle East analyst and lecturer at Pepperdine University. 

This episode of Inside Story aired from Monday, October, 4, 2010.