Chinese President Hu Jintao met his Iranian counterpart Mahmud Ahmadinejad Friday in Shanghai.

Hu said the Chinese government attached great importance to developing friendly cooperative relations with Iran and wished to expand bilateral cooperation on a continuous basis.?

He proposed the two countries enhance political consultation, intensify their friendship and continue contacts and communication in diverse forms at all levels.

China and Iran should deepen economic cooperation, achieve mutual benefit, maintain rapid growth in bilateral trade and actively nurture new areas for economic cooperation, Hu told Ahmadinejad.

Meanwhile the two countries should promote dialogue between their different civilizations, enhance exchanges in cultural sectors, seek mutual respect and common development, refer to each other's experiences and encourage more friendly contacts between the two nations, he added.

Ahmadinejad echoed Hu's proposals saying the Iranian side was willing to intensify cooperation with China in diverse sectors including energy, transportation, telecommunication, the power industry and shipbuilding.

He agreed that further cultural and sports exchanges and dialogues between their different civilizations would assist enhance understanding between the countries.?

On the Iranian nuclear issue Hu said China understood Iran's concern over its right to the peaceful use of nuclear power, upheld the international non-proliferation system and insisted the Iranian nuclear issue should be settled properly through talks.

At present the critical point in the Iranian nuclear issue was to build mutual trust between Iran and the international community, said Hu.

A package of incentives identified by China, Russia, the United States and Europe provided new opportunities for settlement of the issue. The Chinese president said he hoped the Iranian side would earnestly study and actively respond to these incentives and seek an earlier resumption of the nuclear talks.

"The Chinese side is willing to maintain close communication with Iran and all other parties concerned and play a constructive role in seeking a proper solution to the Iranian nuclear issue," Hu said.

Ahmadinejad said his country was willing to maintain peace and stability in the region and the world at large. All the Iranian nuclear programs were peaceful and Iran didn't need, nor did it seek to, develop nuclear weapons, he said.

Iran was willing to solve the nuclear issue peacefully through consultation, said the president. He added the EU's proposal was better than before and has provided new opportunities for resumption of talks. "We're studying the proposal and will respond in the near future."

The two presidents spoke highly of bilateral ties 35 years after their countries first forged diplomatic relations.

"China and Iran are both developing countries and the two peoples have a long history of friendly exchanges," said Hu. "We have reached wide consensus in international affairs and maintained close consultation and coordination on UN reform and human rights issues."

Meanwhile, the two countries had reported robust trade growth and their economic and technological cooperation had proven fruitful, he said.

Ahmadinejad is in Shanghai for the annual summit meeting of the Shanghai Cooperation Organization held on Thursday. Iran is an observer of the organization that brings together China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.

(Xinhua News Agency June 16, 2006)