Iraq has signaled publicly that it is ready to restore diplomatic relations with Egypt after a break of nearly four years provoked by this country's signing of a peace treaty with Israel.

"We are not against restoring ties with Egypt," Iraqi Deputy Prime Minister Tariq Aziz said in an interview with the semiofficial Cairo newspaper Al Ahram. He offered to meet Egyptian Foreign Minister Kamal Hassan Ali to discuss the question.

Analysts here said that the Iraqi offer could mark the long-awaited breakthrough that Egypt has sought in efforts to thaw its largely frozen relations with the rest of the Arab world. Iraq has been considered a likely candidate to start the process because it has been purchasing large quantities of arms and munitions from Cairo to fuel its war with Iran. It also has sent several secret, high-level delegations here to hold military and political talks.

"As an Arab citizen, I say that this step needs to be taken now," Aziz said. "I am personally ready to meet Kamal Hassan Ali or [minister of state for foreign relations] Boutros Ghali at any place, in Cairo or Baghdad, to start a direct dialogue on this issue."

A Foreign Ministry spokesman said that the Iraqi official's statement was under study and was being taken "seriously." But he said that Iraq had not made the offer through diplomatic channels.

Analysts interpreted Aziz's comments as an indication of official policy. It was thought that there was little likelihood that an official of his rank would have made such an offer without the approval of Iraqi President Saddam Hussein, who rules his country with a firm grip.

All of the Arab League's 22 members except Sudan, Somalia and Oman cut off diplomatic and economic relations with Egypt after it signed the treaty with Israel in March 1979 as part of the U.S.-mediated Camp David peace process. Egypt was ousted from the league and lost important financial assistance from the oil-rich Persian Gulf states.

At its last summit in Fez, Morocco, in September, the league reconsidered its decision at the request of Sudan. Radical Arab states led by Syria strongly opposed welcoming back Egypt, but league members did agree that any Arab countries that wished to renew ties with Cairo on a bilateral basis should be allowed to do so.

At least four Arab countries including Iraq quietly stepped up unofficial contacts with Egypt after the final Israeli withdrawal from the Sinai last April, but none has stated publicly that it was ready to resume relations.

In his interview, Aziz praised Egyptian President Hosni Mubarak for his support of Iraq as well as his generally conciliatory attitude toward other Arab leaders.

One of the first decisions that Mubarak made upon taking office following the assassination of president Anwar Sadat in October 1981 was to order a halt to attacks on other Arab leaders in the government-guided Egyptian press. The only significant exception has been his own recent attacks on Syria and its leader Hafez Assad, whom he has accused of deliberate delay in withdrawing his troops from Lebanon because of Syrian designs on that country.

Aziz hinted that Iraq hopes to achieve more than just a restoration of diplomatic relations with Egypt. He spoke of establishing a "strategic understanding" between the two countries and said that this would do a lot to "restore firmness and strength to the Arab ranks."

"Iraq and Egypt together can do a great deal," he was quoting as saying in the Al Ahram interview, which was published in yesterday's editions.

A decision by Iraq to restore diplomatic relations could trigger similar moves by Morocco, Lebanon, Jordan and possibly some of the gulf states. The Moroccan foreign minister, Mohammed Boucetta, already has visited here, and both Lebanon and Jordan recently have received an Egyptian delegation.

Whether Saudi Arabia would follow suit is not clear. The Saudis have sent secret emissaries here several times, and Mubarak attended the funeral of king Khaled in Riyadh last June.

But the Saudis have stated publicly that they would not act until there was a decision by the Arab League as a whole to restore relations. Various Saudi officials have said that the kingdom hopes that Egypt will be reintegrated soon