Egypt's Mubarak meets Iranian parliament speaker

Larijani, who met Mubarak and Egyptian parliament speaker Ahmed Fathi Surur, described the meeting as "very good and constructive."

Egyptian President Hosni Mubarak met Sunday with Iranian parliament speaker Ali Larijani in the first high-level talks between both countries since relations were strained after Israel's war on Gaza.

Larijani, who met Mubarak and Egyptian parliament speaker Ahmed Fathi Surur for two hours, described the meeting as "very good and constructive."

"The two countries' vision on bilateral relations are positive, which is key to the development of the relationship between them," Larijani told reporters.

He said Iran backs the Palestinian Hamas movement and Hezbollah in Lebanon because both Islamist groups "stood up to Israel" while stressing his country "supports and encourages Egyptian efforts for Palestinian reconciliation."

Relations between Iran and Egypt were highly strained during the war on Gaza at the turn of the year, with Cairo accusing Tehran of trying to dominate the region through its alliances with Hamas and Hezbollah.

Tehran for its part blamed Cairo for participating in the blockade of Palestinians in the Gaza Strip by refusing to open the Rafah border crossing, the only entry to the enclave that bypasses Israel.

Asked about the crisis involving neighbouring Iran, whose troops occupied a disputed border oil well, Larijani said the situation had been blown "out of proportion."

"The problem has now been contained," he said.

On Friday, Iraq's state-owned South Oil Co in the southeastern city of Amara said about a dozen Iranian troops had arrived at the field, taken control of the Well 4 and raised the Iranian flag.

But officials said Sunday that Iranian troops had pulled back 50 metres (yards) and removed the flag.

It was the first serious incident between the two neighbours since the US-led invasion of 2003 that toppled Saddam Hussein, whose forces fought a 1980-1988 war against Iran.