KUWAIT (Reuters) - Kuwaiti coastguards arrested seven Iraqi sailors on a fishing boat on Sunday, saying they had trespassed into Kuwait's northern territorial waters, state-run news agency KUNA said.

The sailors had been taken to the Marine Security Department for investigation, KUNA quoted the coastguards' office as saying in a statement.

Diplomatic relations between the neighboring Gulf states have remained fraught since Saddam Hussein's invasion of Kuwait in 1990-1.

Ties between the countries appeared to be improving earlier this month when Iraqi Prime Minister Nuri al-Maliki and his Kuwaiti counterpart agreed to resolve a standoff over war-era debts.

Iraq has been keen to resolve some of its disputes with Kuwait ahead of a March 27-29 Arab League summit in Baghdad, the first to be held there since before the 1990 invasion.

(Reporting by Sylvia Westall; Editing by Andrew Heavens)