This special report on Saudi Arabia is published to coincide with the second gathering of the US-Arab Economic Forum taking place in Houston, Texas. The first such gathering occurred in Detroit, Michigan, in September 2003. Its purpose then was to seek greater economic co-operation and to rebuild trust between the Arab world and the United States in the wake of 9/11.

Inevitably, Saudi Arabia played a central role, partly because it controls a quarter of the world's known oil resources and is thus the economic power-house of the Arab world. Moreover, 15 of the 19 terrorists responsible for the attacks on the World Trade Center and the Pentagon were Saudi citizens and their actions did much to poison goodwill and sow mistrust of Saudis among many Americans.

At that Detroit meeting two years ago, Prince Saud Al-Faisal, the Saudi Arabian foreign minister, made an impassioned plea that trust be restored between the two countries. Well over 90 percent of Saudi people, he said, rejected Bin Laden and what he stood for. The aim of the terrorists had been to drive a wedge between the Kingdom and the US. And indeed, since then, Saudi Arabia had been forced to witness a distressing change in the way Americans perceived their country. It was inherently unfair, he said, to allow a group of deviant criminals to taint a nation of 16 million.

The prince made the point that relationships between countries were founded upon the pillars of economics, investment, commerce and trade. And it was the entrepreneurs, businessmen and investors, rather than governments, who actually established harmonious relationships between the Saudi Kingdom and the US. Two years after Prince Saud's words there are good reasons to believe that such harmonious relations between Saudis and Americans are once again being restored.

Since a triple suicide bombing in Riyadh in May 2003, the Saudi authorities have recognized that they have enemies within their midst and have cracked down hard on al-Qaeda militants and on the religious scholars who have supported them publicly. In February the Kingdom hosted an international counter-terrorism conference that endorsed a Saudi proposal to establish an international center to combat terrorism.

There has been a smooth transition following the death of King Fahd, and under his successor, King Abdullah, Saudi Arabia is on the threshold of a new era in its development. Flush with increased oil revenues, its economy is booming. Private enterprise is being given its head and new and attractive investment opportunities worth $613 billion are being offered in oil, gas, petrochemicals, railways, water, electricity, desalination and other vital sectors.

In economic terms, the Kingdom and the US are more closely entwined than they have ever been. In the past four years American firms are estimated to have invested as much as $8 billion in Saudi Arabia. Bilateral trade has risen to $26 billion a year and there are 360 joint projects underway worth more than $20 billion. When President Bush met Abdullah, who was then still Crown Prince, in Crawford, Texas, in April this year, they noted that it was almost exactly 60 years since President Roosevelt had met King Abdulaziz, the founder of the Saudi Arabian Kingdom, and first established the bonds that still bind the two countries.