TEHRAN Tehran and Lagos agreed Wednesday to further expand their bilateral relations which, they said, are at a prominent level.

"Special bilateral relations and an interest on the part of both Iran and Nigeria to expand their relations have promoted Tehran-Lagos ties to a particular status," Khatami told a joint news conference after receiving his Nigerian counterpart Olusegun Obasanjo at the historical Sa'dabad Palace. Obasanjo arrived here Tuesday on the start of a three-day visit that will include discussions of the oil market.

"Presence of Iran and Nigeria in many international entities can lead to a lasting peace in the world," Khatami said.

He added that Nigeria has a better status among African states, owing to its thick population and plethora of resources.

Khatami also praised Obasanjo, saying that he can be very effective in bringing about a lasting peace.

For his part, Obasanjo told reporters that he would discuss expansion political, economic and trade relations.

He said that Iran is a powerful state in the Persian Gulf region, expressing hope that Nigeria would use experiences Iran has achieved in industrial sector.

"We should pour cold water on the hands of those who think that the developing countries cannot have trade exchanges," he added.

Upon his arrival Tuesday night, the Nigerian president said, "We respect Iran for various reasons, and the respect is based on the culture, civilization and historical closeness of the two countries."

"My visit's main objective is oil cooperation and we are counting on Iran's experience in this area," he said.

Later on, Obasanjo and his delegation attended the mausoleum of the late Founder of the Islamic Republic Imam Khomeini and paid tribute to him. They placed a wreath of flowers on his tomb.

During his visit, Obasanjo will meet with Foreign Minister Kamal Kharrazi and other high-ranking officials.

The Nigerian president and his delegation are expected to discuss movements in the oil market and cooperation in the energy and agriculture sectors with their Iranian counterparts during the trip.

The visit is the first to the sensitive Middle East region by Obasanjo since he took power in Africa's most populous country in May 1999.

Nigeria is the sixth exporter of oil in the world and a member of the Organization of Petroleum Exporting Countries (OPEC). It produces more than 2 million barrels of oil per day.

The two sides are also expected to discuss cooperation in defense and internal security and the Group of 77 (G77) developing nations, the chairmanship of which Nigeria will hand over to Iran later this year.

Also Obasanjo on Wednesday met with the Iranian Defense Minister, Rear Admiral Ali Shamkhani, where he reviewed security ties between Iran and Nigeria.

Iranian defense minister at the meeting pointed to Tehran-Abuja trade, economic industrial and defense ties and called for broader ties between Iran and Nigeria.

He called for expansion of ties between the two countries saying that the broader the ties are, the better it is for the national interest of the both nations.