Iraq and Kuwait, two countries that share a small border and big history of mutual suspicion and war, are at it again. This time they are arguing about Kuwaiti plans to build a mammoth port that Iraq claims interferes with its shipping lanes in the Gulf.

Although it seems unlikely the tiff could escalate into another conflict, the remarks are disturbingly reminiscent of the recriminations that preceded Saddam Hussein's invasion of Iraq in 1990 and point to the uneasy relationship that has persisted long after Saddam's ouster.

Kuwait's public prosecution Sunday freed Islamist MP Mohammed Hayef after detaining him for one day for questioning over alleged threats to the Syrian ambassador, his lawyer said.

Hayef was detained after he initially refused to pay a 2,000-dinar ($7,350) bail "but later he agreed and paid the bail and was freed," lawyer Adel Abdul Hadi told Agence France Presse.

Five Kuwaiti MPs Wednesday submitted a draft bill demanding that the government suspend all cooperation agreements and loans with Syria over its bloody crackdown on pro-democracy protesters.

Spokesman for the opposition Popular Action bloc, MP Mussallam al-Barrak, said the bill calls for ending all forms of cooperation agreements and memoranda of understanding between Kuwait and Syria.

An Iraqi technical delegation has held talks in Kuwait over a seaport Baghdad claims would strangle its narrow shipping lanes in the Gulf, the Kuwaiti foreign ministry said on Tuesday.

The Kuwaiti side presented illustrations and studies on Mubarak al-Kabir port and its impact on shipping in Khour Abdullah waterway, said an official quoted by the KUNA news agency.

Kuwait has beefed up security around a controversial port project ahead of a visit by an Iraqi delegation for talks, a security official was quoted as saying Sunday.

The increased security around the Mubarak al-Kabir port on Bubiyan Island follows remarks by an Iraqi MP in the Kuwaiti press, which cited him as saying Iraqi militant groups could "easily invade Kuwait". The MP told Agence France Presse, however, that his comments were misinterpreted.

Stock markets in the Gulf, except Saudi Arabia, opened up on Sunday after a volatile week trailing the behavior of global markets hit by uncertainty over European and U.S. economic woes.

The Dubai Financial Market index continued its rise on Sunday after returning to the green in the latter part of last week.

OPEC member Kuwait posted a healthy budget surplus of 5.3 billion dinars ($19.5 billion) in the last fiscal year on record revenues thanks to high oil prices, the finance ministry said on Thursday.

Revenues in the year ended March 31 hit 21.5 billion dinars ($79 billion), the highest ever in the emirate's history, according to figures on the ministry's website.

More than 2,000 Kuwaitis have rallied outside the Syrian embassy in the Gulf state demanding the expulsion of the Syrian envoy and the "freezing" of relations with Damascus.

Holding Syrian flags, the demonstrators chanted "the people want to expel the ambassador," amid a heavy police presence that prevented some protesters from approaching the embassy building.

The oil ministry in OPEC member Kuwait on Monday denied that it has started a joint oil development with neighbouring Iran.

"There is no cooperation between the two sides in this regard," said the ministry assistant undersecretary for technical affairs Ali Sabt, cited by the official KUNA news agency.

Kuwait and Bahrain on Monday decided to recall their ambassadors from Damascus, increasing the regional isolation of President Bashar al-Assad, a day after Saudi Arabia took the same step.

"We have decided to recall our ambassador from Syria for consultations," Kuwait’s Foreign Minister Sheikh Mohammed al-Sabah told reporters after meeting a parliamentary committee.