The Government is actively considering the reopening of an Irish embassy in Baghdad, according to the Department of Foreign Affairs.
"There's no firm plans either to reopen or not. We are keeping it under active consideration," the spokesman said. The Irish embassy in the Iraqi capital closed in 1990, shortly before the first Gulf War.
However, diplomatic relations with the regime of Saddam Hussein were never broken off and bilateral contacts continued via the Irish mission at the United Nations in New York.
EU foreign ministers agreed in principle at an informal meeting on the Greek island of Rhodes early this month that member-states should send diplomatic representatives back to Baghdad. The issue has since been discussed at the highest levels in the Department of Foreign Affairs.
The security situation in Baghdad remains fraught, with gunfire every night and, as observers put it: "The people you ring about intruders in the garden might turn out to be the intruders in the garden."
International commercial firms setting up operations in Baghdad have been advised that they will have to ensure the safety of their own personnel.
Former Fianna Fáil TD Mr Liam Lawlor, who was jailed three times for refusing to co-operate with the Flood tribunal, recently announced that he was travelling to Baghdad to seek business contracts for the rebuilding of Iraq, particularly refrigeration and cold-storage facilities.
He was a regular visitor to Iraq in the 1970s and 1980s and was acquainted with ministers in the former regime. Former Taoiseach Mr Albert Reynolds is also reported to be pursuing Iraqi business opportunities.
While a number of EU states have established a presence in Baghdad, there is as yet no Iraqi government to whom they could present their credentials. "There are no host authorities at the present time," sources said.
It was not clear whether Ireland would need to formally recognise a new Iraqi government, in co-operation with its EU partners.
The last Irish ambassador to Iraq was Mr Antóin Mac Unfraidh, while the Saddam Hussein regime did not have a resident ambassador in Dublin but conducted relations from London.
Iraq imported large quantities of Irish beef under circumstances which became the subject of intense political controversy in the late 1980s and early 1990s.