"The combined aid and rescue exercise in the Caspian Sea between the countries of the Islamic Republic of Iran and Azerbaijan, hosted by the Iranian Navy, is being held in Bandar Anzali" in northwestern Iran, the official IRNA news agency reported.
The exercises, dubbed AZIREX2024 and bearing the slogan of "cooperation for peace and friendship", would last for two days, it added.
IRNA said two Azerbaijani vessels would join the Iranian destroyer Deylaman for the exercises.
Relations between the two countries soured in January 2023, when a gunman stormed into Baku's embassy in Tehran, killing a diplomat and wounding two guards.
Iran's foreign ministry at the time strongly condemned the attack, saying the motivations behind it were "personal".
But Azerbaijan criticised Iran over the shooting, with foreign ministry spokesman Ayxan Hacizada saying an anti-Azerbaijani campaign had "encouraged the attack".
In April 2023, Azerbaijan said it had notified Iran's ambassador to Baku that four employees of his embassy had been declared personae non gratae.
Iran followed suit by expelling four Azerbaijani diplomats a month later, but in July Azerbaijan's embassy in Tehran resumed regular work.
Ties between the two countries have traditionally been strained, with the former Soviet republic a close ally of Iran's historical rivals Turkey and arch-enemy Israel.
Iran also fears Azerbaijani territory could be used for a possible attack on Iran by Israel, a major arms supplier to Baku.
Iran and Israel have in recent months engaged in tit-for-tat direct attacks against one another with the latest being conducted on October 26 by Israeli warplanes against Iranian military sites that led to the death five of Iranians.
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