By Edmund Blair
Sheikh Mohammed meets Iranian President to discuss economic ties during landmark visit to Tehran.
The prime minister of the UAE discussed trade ties on Monday in Iran, Iranian state television reported, at a time when the US is seeking to isolate Tehran over its nuclear ambitions.
Sheikh Mohammed bin Rashid Al-Maktoum, who is also UAE vice president and the ruler of the Gulf trading hub of Dubai, held talks with President Mahmoud Ahmadinejad and other officials.
State television said Iranian officials called for "improving ties especially in the economic field".
Officials had also said prior to his visit the talks would cover business ties, including investment, transferring electricity, exports of Iranian gas and boosting the volume of trade.
US sanctions on Iranian banks have made it tougher for Iranians to do business, prompting some to set up offices in Dubai to circumvent restrictions. Many other Iranian firms have operated for years in Dubai across the Gulf.
Shi'ite Muslim Iran has been seeking to boost ties with its Arab neighbours and Ahmadinejad in December became its first president to attend a summit of the Gulf Cooperation Council, made up of six mostly Sunni Muslim states.
Washington accuses Tehran of seeking to master technology so that it can build atomic bombs, a charge Iran denies.
US officials have urged companies, including during visits to nearby Gulf Arab states, to cut business ties with Iran.
Many goods are re-exported from Dubai to Iran. In addition, Iran and Crescent Petroleum, a shareholder in UAE energy firm Dana Gas, have been negotiating a deal for the supply of Iranian gas to the UAE. Talks have been held up by a price row.
The UAE, which like Iran is a big Opec oil producer, needs gas to fuel rapidly rising consumption by industry and power plants.
Iran sits on the world's second largest gas reserves, but has been slow to develop exports, which analysts blame partly on USsanctions that have restricted access to technology.
Despite a history of trading ties, the two Gulf states have a long-running dispute over the sovereignty of three Gulf islands - Abu Musa and the Greater and Lesser Tunbs. (Reuters)