DUBAI, United Arab Emirates, July 6 (UPI) -- The president of the United Arab Emirates has agreed to erase all of Iraq's debts to the country, an official said.

UAE Sheik Khalifa agreed to annul Iraq's nearly $7 billion in debt after a meeting with Iraqi Prime Minister Nuri al-Maliki, CNN reported Sunday.

Lawmakers in the Emirates also nominated Abdullah Shieha to serve as the country's new ambassador to Iraq.

An unnamed source said Dubai planned to open its embassy in Baghdad by the end of the year.

Iraq has urged Arab states to expedite efforts to set up their embassies in Iraq.