Iraqi President Jalal Talabani greeted Mr Ahmadinejad at his car as it pulled up to his residence in the city's central Karrada district. He had earlier been greeted at the airport by Iraqi Foreign Minister Hoshiyar Zebari.

At a joint news conference later, Mr Ahmadinejad said the landmark visit opened a new chapter in 'brotherly' relations between the two Muslim neighbours, which are both run by Shi'ite majorities.

'This visit will open a new chapter in the two countries' bilateral relations and it will help the atmosphere of cooperation in the region,' Mr Ahmadinejad said.

'A visit to Iraq without the dictator is a truly happy one,' he added, referring to Saddam Hussein, Iran's arch-foe who was deposed during a US-led invasion in 2003 and executed by the Iraqi government in December 2006.

But Mr Ahmadinejad's visit is expected to be as much about symbolism as it is about cementing ties.

Critics say he is using it to bolster support back home ahead of a parliamentary election later this month.

The polls are being seen as a referendum on the Iranian leader, who has come under fire in Iran for spending too much time on anti-Western rhetoric and not enough on the economic problems plaguing the country.

The visit is also being viewed as an act of defiance towards the US, which sought to downplay the trip.

The US has more than 150,000 troops in Iraq and accuses Iran of training and giving weapons to Shi'ite extremists, a claim that Teheran denies.

Mr Ahmadinejad is expected to sign five to 10 agreements with Iraq. After his meeting with Mr Talabani, he went on to meet Iraqi Prime Minister Nouri al-Maliki. Both men have made official visits to Iran since taking office.

Mr Ahmadinejad's visit is due to end today. Mr Talabani's residence is located across the Tigris River from the new US Embassy in the fortified Green Zone, an area that has been repeatedly hit by mortar attacks, with the US blaming Shi'ite militants using Iranian weapons.

Mr Ahmadinejad yesterday dismissed charges by US President George W. Bush that Teheran supported militants.

'Bush always accuses others without evidence and this increases problems,' he said. 'The Americans have to understand that Iraqi people do not like America.'

Mr Ahmadinejad had sought to reassure Iraqis ahead of his trip that Iran was not fuelling violence in Iraq and wanted to promote peace.

Iran and Iraq have not always had rosy relations. Both sides were hostile to each other throughout Saddam's regime and fought a destructive eight-year war after Saddam invaded Iran in 1980. About one million people died in the conflict. But when Saddam's Sunni-dominated regime fell and Iraq's Shi'ite majority took power after the US-led invasion, long-standing ties between the Shi'ites of both countries flourished again, though the two neighbours have yet to sign a peace treaty.

Today, trade between them is brisk. Millions of Iranian pilgrims travel to major Shi'ite shrines in Iraq, and Iran is building a major airport for pilgrims to fly to Shi'ite shrines in Najaf and Karbala.

But complicating these relations are the US troops helping to prop up Mr Maliki's administration.

Mr Ahmadinejad's visit aims 'to tell the US it is us and not you who have influence in Iraq', said Mr Mohammad Sadegh al-Hosseini, an Iran-based expert on Iranian-Arab affairs.

Dr Jon Alterman, head of the Middle East programme at Washington's Centre for Strategic and International Studies, said the visit sends a 'clear message to Iraqis that the Iranian influence in the country is significant and enduring'.

But at the same time, Mr Ahmadinejad 'does not want to threaten the Iraqis. He does not want to threaten Gulf states who fear that Iraq will be an Iranian satellite'.

'He has a thin line to walk,' he said.

ASSOCIATED PRESS, REUTERS, AGENCE FRANCE-PRESSE