From Researching Virtual Initiatives in Education
This entity is not a country.
The Neutral Zone, in full the Saudi–Iraqi Neutral Zone, was an area of 7,044 km² on the border between Saudi Arabia and Iraq within which the border between the two countries had not been settled. The Treaty of Muhammarah (Khorramshahr) of 1922 forestalled the imminent conflict between Great Britain, which held the mandate for Iraq, and the Kingdom of Nejd, which later became Saudi Arabia (when combined with the Kingdom of Hejaz). The treaty specifically avoided defining boundaries. Following further negotiations, the Protocol of Uqair (Uqayr) in 1922 defined most of the borders between them and created the Neutral Zone.
No military or permanent buildings were to be built in or near the Neutral Zone and the nomads of both countries were to have unimpeded access to its pastures and wells.
The United States Office of the Geographer regarded the area as only having an approximate boundary, rather than a precise one, with an estimated line being drawn approximately through the centre of the territory on official maps.
Administrative division of the zone was achieved in 1975, and a border treaty concluded in 1981. For unknown reasons the treaty was not filed with the United Nations and nobody outside Iraq and Saudi Arabia was notified of the change or shown maps with details of the new boundary.
As the Gulf War approached in early 1991, Iraq canceled all international agreements with Saudi Arabia since 1968. Saudi Arabia responded by registering all previous boundary agreements negotiated with Iraq at the United Nations in June 1991. Thus ended the legal existence of the Saudi–Iraqi neutral zone.
There is a fascinating article on this at http://www.straightdope.com/columns/read/785/whats-up-with-the-neutral-zones-near-saudi-arabia
Pedants may now want to read the entry on Saudi-Kuwait Neutral Zone.
The Saudi–Iraqi Neutral Zone formerly had the ISO 3166-1 codes NT and NTZ. These codes were discontinued in 1993. The FIPS 10-4 code for the Saudi–Iraqi Neutral Zone was IY; that code was deleted in 1992.