Syrian President Bashar al-Assad and Iranian Vice-President Mohammad-Reza Rahimi on Thursday discussed means of establishing an EU-style regional bloc in the Middle East, al-Assad's office said, DPA reported.
The two met in Damascus at the start of the 12th session of a joint, Syrian-Iranian committee to strengthen economic relations between the two neighbours, a statement from the Syrian presidency said.
The proposed economic bloc would "bring together the region and bring prosperity to its peoples, while contributing to enhancing security and stability," the statement said.
The allies have drawn closer together in recent months, despite tentative efforts from Washington to tempt Syria out of its alliance with Iran.
After visiting Damascus in February, Iranian President Mahmoud Ahmadinejad said the two countries would soon dispense with visa requirements for the other's nationals.
Syria's alliance with Iran has been an irritant in its relations with other Arab countries. In recent months there have been signs of a thaw in Syria's relations with Saudi Arabia and Egypt, in particular.
Iranian diplomats in Damascus told the German Press Agency dpa that Rahimi would meet with exiled political leaders of Palestinian factions on Thursday afternoon.
Rahimi and the exiled leaders of Palestinian factions hosted in Damascus would discuss recent Israeli military incursions in the Gaza Strip, and Israeli attempts to "Judaize Jerusalem" through construction in Arab neighbourhoods, the diplomats said.
Also on the agenda Thursday were developments in the Palestinian territories and in Iraq, al-Assad's office said, adding that Rahimi had thanked Syria for its support of "its right to possess nuclear energy for peaceful purposes."