UAE Prime Minister Sheikh Mohammad bin Rashed al-Maktoum, who is also ruler of Dubai, is the most senior Emirati official to make a bilateral visit to Tehran since its 1979 Islamic revolution.
"Iran and the United Arab Emirates have historical and strong relations and with my trip to the Islamic Republic of Iran bilateral relations will rise to new horizons," the Mehr news agency quoted him as saying.
Despite pressure from the United States on its Arab allies to slacken their ties with its arch-foe Iran, the UAE is by far the Islamic republic’s largest trading partner.
"The intervention of the foreigners does not have any effect on the boosting of cooperation between Iran and the UAE," said President Mahmoud Ahmadinejad during his talks with Sheikh Mohammad, according to the ISNA news agency.
Iranian statistics put bilateral trade at 11.7 billion dollars in the Iranian year ending in March 2007, with imports from the UAE forming the bulk of the exchanges at 9.2 billion dollars.
Booming Dubai serves as a hub for Iranian business and a crucial link to the world economy, despite a longstanding dispute between Abu Dhabi and Tehran over three strategic Gulf islands.
"Iran and the UAE can cooperate for sustainable security in the region," said Ahmadinejad.
Iran’s First Vice President Parviz Davoudi after his talks with Sheikh Mohammad stressed "Iran’s right to peaceful nuclear activities", Mehr reported.
The West fears Iran could use atomic technology to make a nuclear bomb but Tehran insists it only wants electricity.
Ahmadinejad has been working to boost Iran’s relations with Arab states, himself making the first visit by an Islamic republic leader to the United Arab Emirates last May.
He also notched up other firsts by performing the hajj pilgrimage to Islam’s holiest sites located Saudi Arabia in December and attending the end-of-year annual summit of the Gulf Arab states.
Ahmadinejad has also made enthusiastic noises about the chances of resuming full diplomatic relations with Egypt.