Iran, Syria's most important strategic ally in the Muslim world, has approved of President Assad's decision, which may reopen the land route between Damascus and Tehran - at its shortest distance, a mere 300 miles. Already, cars with Syrian registration plates are circulating in Baghdad, and at a recent trade fair in the Iraqi capital the portraits of President Assad and President Saddam Hussein stood alongside one other.
It is not difficult to understand why President Assad has chosen to take so extraordinary a step after 17 years of frozen relations between the warring Baath parties of Damascus and Baghdad. Syria is deeply concerned not only by Israel's military co-operation with Turkey but by Turkey's newly constructed "security zone" inside northern Iraq, an area of occupation controlled - according to Syrian officials - by at least 20,000 Turkish troops. Israeli aircraft are already permitted by Turkey to fly along Syria's northern border and could conceivably fly over the Turkish "security zone" to the north-east of Syria.
In another Middle East war, President Assad could thus face his Israeli enemy on three fronts - to the south, along Golan and in southern Lebanon; to the north, along his frontier with Turkey; and on his north-eastern flank with Iraq. Syria does not even rule out a Turkish military incursion over the Syrian border - ostensibly to search for Kurdish guerrillas - in the event of another Syrian-Israeli war. The re-opening of economic relations with Iraq is thus a response to the Israeli-Turkish alliance, effectively opening a Syrian bridgehead eastwards to Iran.
During his recent visit to Tehran, both President Assad and the new Iranian president, Sayed Mohamed Khatemi, agreed the territorial integrity of Iraq must be preserved; they also regarded the Israeli military relationship with Turkey as a threat to the security of Iran as well as Syria.
In time of war - though neither side have said as much - Iran may be able to send military materiel to Syria by land, with the compliance of Baghdad; the shortest land route between the Syrian-Iraqi frontier at Al-Thanef and the Iraqi-Iranian control post at Qasr Shirin is only 300 miles.
But President Assad, who is taking care not to break UN sanctions against Iraq, has refrained from renewing political relations with Baghdad. There have been no talks between the two rival Baath parties and no meetings have been arranged between senior officers in the Syrian and Iraqi party commands; in other words, Saddam's regime itself is not receiving any support from Damascus. Syrian officials stress that humanitarian concern underpins their efforts to help the Iraqi population to withstand UN sanctions. Diplomatic contacts were only renewed last year when a Syrian diplomat in Tehran, Mohamed Khoder, was instructed to attend a party given by the Iraqi charge d'affaires in Tehran, Saleh Nouri Sarmad.
Then on 19 May this year, Rateb al-Shellah, the president of the Syrian chambers of commerce federation, led an economic delegation to Baghdad, signing contracts worth an estimated pounds 9.5m. On 13 June it was the turn of Zuhair Yunis, Mr Shallah's Iraqi opposite number, to head a 37-man delegation to Damascus; Syria promised to provide Iraq with pounds 628,000 worth of medicine - the first Syrian trucks carrying medical supplies crossed the border on 10 July - and reportedly agreed to restore the telephone lines that had been cut between the two countries for 17 years.
A week later, the portraits of Hafez Assad and Saddam Hussein were raised next to each other at a Syrian medical equipment exhibition in Baghdad. Saddam's picture will also be displayed when the Iraqis are allowed - for the first time in more than a decade-and-a-half - to open a stand at the Damascus international trade fair later this month. At the same time, Saddam Hussein closed down the anti-Assad Voice of Arab Syria radio station run by Amin Hafez in Baghdad; a little later, Syria shut the anti- Saddam Voice of Free Iraq radio in Damascus, whose broadcasts had already muted their hatred for the Iraqi regime to little more than music and discussion programmes.
According to the Syrians, their own businessmen initiated the new trade with Iraq in an effort to relieve Iraqi poverty. "The Iraqis were discussing their suffering with some Syrian merchants and asked them `why is Syria punishing Iraqis as a people?' - and that is how we came to send a delegation to Baghdad," Mohamed Salman, the Syrian minister of information, told The Independent. "Then Dr al-Shellah headed a group of Syrian merchants on a visit to Baghdad ... Following this, Iraq requested the UN to allow it to open a (road) passage to Syria, like the ones with Turkey and Jordan. So the commercial deals will be confined to the rules of the UN security council's decision - food for oil.
Punishing Iraq was "hurting the Iraqi people more than their government", Mr Salman said. "But there are no political relations between Syria and Iraq. Jordan, Turkey, Iran - even the (Arab) Gulf states - deal with Iraq on only the economic level. Dealing with Iraq on a popular level is different from doing so on a political level. I assure you that, till now [sic], there is no formal relationship with Iraq," said Mr Salman.
Informal it may be, but a message nonetheless to the United States as well as Israel that Syria is not going to remain inactive in the face of political pressure. President Assad's assertion that Syria will never accept Israel's refusal to hand back the occupied Syrian Golan Heights - "we won't give up a single Golani tree," he told the Iranians last month - has now been augmented by a new relationship in the Arab world which will link Damascus, Baghdad and Tehran.