TEHERAN - RELATIONS between Iraq and Iran are developing in a number of ways, Iraqi Prime Minister Nouri al-Maliki said during a visit to Iran on Saturday.

'The exchange of high ranking visits between the two country's officials shows that the bilateral relations are developing in different areas,' Mr Maliki said after a meeting with Iran's first vice-president, Mr Parviz Davoudi, according to the Iraqi leader's office.

Mr Maliki, who arrived on Saturday for a two-day visit was also to meet Iranian President Mahmoud Ahmadinejad in Teheran and with Foreign Minister Manouchehr Mottaki.

Ministerial members of Mr Maliki's delegation immediately went into talks with their Iranian commerce, power and transportation counterparts, the official IRNA news agency said.

The two sides agreed to boost bilateral trade from the current level of about five billion dollars, with Mr Maliki urging greater Iranian investment for his war-battered country.

'After elevating security and freeing Iraq from sectarian fighting, it is time to work hard to reconstruct the country and there is a need for companies from neighbouring nations to take on reconstruction projects,' Mr Maliki said.

Iran and Shi'ite-majority Iraq waged a war between 1980 and 1988 in which around one million people died but ties have warmed considerably since the overthrow of Saddam Hussein's Sunni-dominated regime in 2003 by US-led forces.

Mr Maliki's fourth visit to Iran since he took office in 2006 is his first since the December 14 signing of a bilateral security agreement for US troops to remain in Iraq until the end of 2011 - a deal that irked Teheran.

The Iraqi premier's trip was initially scheduled for late December. -- AFP