UPDATE 3-Cairo says Iran has not appointed Egypt ambassador
(Adds senior Muslim cleric on Iran)
CAIRO, April 19 (Reuters) - Egypt said on Tuesday Iran had not appointed an ambassador to Cairo, denying a news report that the two countries had restored diplomatic relations after more than 30 years of hostility.
The website of Iran's Press TV earlier reported that Tehran had appointed Ali Akbar Sibuyeh, a career diplomat who is the son of a senior cleric, as envoy to Cairo.
Mainly Sunni Muslim Egypt and predominantly Shi'ite Iran are among the biggest and most influential countries in the Middle East. Ties between the countries were severed in 1980 following Iran's Islamic revolution and Egypt's recognition of Israel.
There have been signs of warming relations since mass protests deposed Egyptian President Hosni Mubarak in February.
"This report is absolutely incorrect," Egypt's foreign ministry said in a statement on the state news agency MENA. "Diplomatic relations have not yet been resumed."
Iran's foreign ministry also declined to confirm the report, saying it was "guesswork".
Egypt's foreign minister said earlier this month Cairo was ready to re-establish diplomatic ties, signalling a shift in Iran policy since the fall of Mubarak.
In February, two Iranian warships passed through Egypt's Suez Canal after approval from the military rulers in Cairo. Israel called Iran's move a provocation.
Egypt is upset with Iran for continuing to praise Khaled Islamboli, who assassinated President Anwar Sadat in 1981 following the peace deal with Israel. The city of Tehran named a street after him, long an irritant.
Both countries have competed for influence in the Middle East, and Iran's role in the region has come under increasing scrutiny since a wave of popular pro-democracy uprisings began.
Iran is the largest Shi'ite-dominated country in the region and has long held sway over Syria and Shi'ite militant groups in neighbouring Lebanon.
Tehran has also voiced support for anti-government protesters in Bahrain, where the majority of the population are Shi'ites, raising the ire of Sunni powerhouse Saudi Arabia and other Gulf countries long wary of its influence.
Egypt has so far not weighed in on the dispute, but on Tuesday, the head of Cairo-based al-Azhar, one of Sunni Islam's most prominent institutions, urged Iran to stop meddling in Arab affairs to avoid igniting sectarian tensions.
"We hope that Iran will stop interfering in the internal affairs of Arab countries and to regard what is now happening in the region as an internal affair, to prevent sectarianism and more bloodshed," Sheikh Ahmed al-Tayyeb told reporters. (Reporting by Robin Pomeroy in Tehran and Miral Fahmy; Editing by Andrew Heavens and Paul Taylor)