Iran's President Hassan Rouhani says Iran is ready to restore ties with Saudi Arabia if it stops bombing Yemen and cuts its alleged ties with Israel.

In a speech broadcast on Sunday, Rouhani said the regional rivals could have “good relations” if the Saudis end their “false friendship” with Israel and halt the “inhuman bombardment” of Yemen, where a Saudi-led coalition is battling Houthis.

Saudi Arabia severed diplomatic relations with Iran in January 2016 after Iranian demonstrators attacked Saudi diplomatic missions in response to the Saudi execution of a prominent Shia cleric.

Tensions spiked again last month after the Houthis fired a ballistic missile that was intercepted near Riyadh.

Saudi Arabia does not recognise Israel, but the two countries have a shared interest in countering Iran.