By Rania El Gamal
KUWAIT (Reuters) - Gulf Arab states welcomed Iran's "new direction" under President Hassan Rouhani on Wednesday, but said the Islamic Republic should do more to promote stability in a region that has long viewed it with mistrust.
The Sunni Muslim-ruled Gulf Arab oil producers, especially regional heavyweight Saudi Arabia, see Shi'ite Iran as their chief rival and worry that its interim nuclear deal with world powers last month could signal a resurgence in its influence.
But the language used by the Gulf Cooperation Council (GCC) summit was markedly toned down from last year when Gulf Arab leaders condemned what they called Iran's interference in their countries' internal affairs, and called on it to halt actions that "increased tension and threatened the region's security".
At the end of a two-day summit in Kuwait on Wednesday, the GCC, which groups Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and the United Arab Emirates, called for good neighborly relations with Iran based on "non-interference in internal affairs".
A communique read by GCC Secretary General Abdullatif al-Zayani said: "The GCC welcomed the new direction of the Iranian leadership towards the GCC countries, in the hope that this direction will be followed with tangible steps that will reflect positively ... on peace, security and stability in the region."
Since taking office in August, Rouhani has overseen a gradual warming in Iran's foreign relationships, culminating in a November 24 interim nuclear deal with world powers.
Tehran agreed to limit uranium enrichment in return for an easing of international sanctions. GCC states see this as a step towards curbing what they fear is a secret Iranian nuclear weapons program. Tehran says its program is peaceful.
NUCLEAR POWER PLANTS
Iranian Foreign Minister Mohammad Javad Zarif has visited Kuwait, Qatar, Oman and the UAE since the nuclear deal was struck to try to ease Gulf Arab worries.
The GCC communique also voiced concern over Iran's plans to build more nuclear power plants on the Gulf, saying these "threaten the environmental system and water security".
Iranian media have said Iran, which already has one nuclear power station at Bushehr, is in talks with Russia to construct more, based on a 1992 agreement with Moscow.
The UAE is building a nuclear power plant near Abu Dhabi and Saudi Arabia plans to build several over the next decade.
The GCC has its own differences, which burst into the open when Oman publicly dismissed a Saudi proposal for a union with Bahrain, Kuwait, Qatar and the United Arab Emirates.
The plan, proposed two years ago by Saudi King Abdullah, had been expected to be one of the main topics at the annual summit.
Zayani skirted questions about the proposal, saying the GCC had agreed to conduct "continuing discussions" about it.
Kuwait's Foreign Minister Sheikh Sabah al-Khaled al-Sabah played down the rifts within the GCC. "God willing, we will ... reach a consensus among us," he told reporters.
Gulf analyst Abdulkhaleq Abdullah at the summit said Oman's comments had forced people to focus on perceived disunity.
Despite their similarities, the six Gulf Arab monarchies have varying regional outlooks, economies and political systems.
Oman, in particular, has always been an outlier in the group and has pursued better ties with Tehran. It hosted secret talks between Iranian and U.S. officials that paved the way for last month's nuclear pact - a deal that infuriated the Saudis.
"The Omanis have a firm stance with anything that is seen against Iran. Oman values its relations with Iran as much as it values its relations with the GCC," Abdullah said.
The GCC, whose members rely mainly on a U.S. security umbrella, also agreed to set up a unified military command to tighten defense cooperation, but offered few details.
The same project was discussed at last year's GCC summit, but it has long been prey to sensitivities about sovereignty.
(Writing by Yara Bayoumy; Editing by Alistair Lyon)