The prime minister came to Iran on 21 October 2003 for talks on key international, regional and bilateral matters. Premier Jamali held official talks with President Seyed Mohammad Khatami to explore ways and means for further cooperation in various fields, focusing on trade and economic issues. The Prime Minister was accompanied by a high level delegation, including Ministers of Commerce, Information, Petroleum and Natural Resources as well as other top officials. He met with Grand Ayatollah Seyed Ali Khamenei, the Supreme Leader of Iran, after paying his respects at the tomb of the late Imam Khomeini. The Prime Minister also met with former Iranian President and Chairman of the Expediency Council Akbar Hashemi Rafsanjani. The Prime Minister departed from the holy city of Mashhad after visiting the Shrine of Imam Reza (AS).

The two sides have decided to extend concessions to each other for promotion of bilateral trade and Pakistan, Iran and Turkey will adopt a flexible attitude to promote trade ties amongst them.

Pakistani Premier has said that Pakistan and Iran have agreed to set a target to boost trade to $1 billion and to finalize agreements in different fields in two months. Upon his arrival in Tehran, the Prime Minister said his visit to Iran would open new vistas of economic and trade cooperation besides boosting ties between the two brotherly Muslim countries. "If there were any irritants and misunderstandings between the two countries, they have been removed during my highly successful visit," Jamali said. He said the two sides have decided to extend concessions to each other for promotion of bilateral trade and Pakistan, Iran and Turkey would adopt a flexible attitude to promote trade ties amongst them.

Jamali maintained that Pakistan and Iran have agreed to open another border point between Sarwan in Sistan-Baluchestan province of Iran and Panjgur in Makran in Balochistan to promote trade and people-to-people contact. He said the Joint Ministerial Commission would be activated to achieve the target of enhanced economic interaction. "Experts will meet in about three months to take follow-up action proposals agreed between the two countries including cooperation in oil and gas, customs, tariff and export of Pakistani rice to Iran," he said. Pakistan has accepted an Iranian proposal to lay gas pipelines between Iran and Pakistan as he said India was hesitating to make any headway on the project. "Tehran has proposed lying of gas pipeline between Iran and Pakistan and we accepted the proposal and now technical teams will work out details," Jamali added.

The Premier said during discussions with Iranian leaders he found their attitude positive and this augurs well for relations of the two countries and even if there were any lukewarm aspects they have been solved. He said the two countries have decided to hold high-level consultations at least once a year to maintain the momentum of cooperation in different fields. "The two sides also had similar views about curbing the menace of sectarianism," added the Prime Minister.

For his part Zafarullah Jamali, referring to the three memoranda of understanding (MoU) inked by the two countries, said that the implementation of the mutually-signed documents is more important than their number. Before leaving Tehran, the Premier also held talks with the Chief of the Expediency Council Akbar Hashemi Rafsanjani on matters of mutual interest. In the meeting, Rafsanjani reiterated the need for making use of the existing potential of both sides and expediting the trend of joint cooperation, given the cultural, religious and historical commonalties between the two neighboring states. Pointing to the impact of understanding and unity on promotion of regional peace and stability, especially in Afghanistan, the official said, "Participation in reconstruction of Afghanistan has no benefits for the regional states. It is rather a humanitarian act."

In the meeting, the Pakistani official briefed the EC head on the latest political and economic developments in Pakistan and underlined the significance of broadening ties with Iran. The two officials also exchanged views on the regional crises in Iraq, Palestine and Kashmir.

Pakistan Tehrik-e-Insaf (PTI) political party Central Spokesman Akbar Babar believes it is imperative for both Islamic states to interact on key regional and international issues, besides expansion in economic and trade areas. He hailed the Premier’s visit to Iran and hoped it would go a long way in enabling both countries to develop unanimity on the issue and enhance bilateral cooperation. Iran and Pakistan, he said are ideally located, to focus on promotion of bilateral commerce and trade, in addition to identifying new areas of mutual benefit. He strongly advocated establishing a strategic relationship between the two countries by cashing in on their commonalties and old religious and cultural bonds. PTI spokesman was hopeful that Iran-Pakistan relations in the times to come would be a role model for other Islamic nations to emulate to face the increasing pressure from the West.

Tehran and Islamabad have also reached an understanding for by-road bilateral trade and exploring barter options. Both sides could ultimately agree on a bilateral free trade agreement. Iran and Pakistan will be exploring possibility of (crude) oil-for-rice barter exchange, besides discussions on the proposed gas pipeline to India from Iran via Pakistan. Pakistan’s Petroleum Minister Naurez Shakoor sought Iran’s nod that a gas pipeline might be built from Iran to Pakistan if India was not ready for the tri-partite project despite Islamabad’s repeated assurances thereof. India insists it will not agree to lying of the pipeline from Iran via Pakistan because of New Delhi-Islamabad differences. The project, conceived over a decade ago, has not seen the light of the day because of India’s concerns about security.

A noted Pakistani analyst said closer Tehran-Islamabad relations were in the best interest of both the countries and the Islamic world. Major-General (Retd) Seyed Zakir Hussain Zaidi declared that there was a growing realization on both sides to further cement bilateral relations. He expressed the hope that Jamali’s interaction with the Iranian leadership would help forge greater harmony on issues of mutual interest. "It is in the interest of Pakistan and Iran that relations between Tehran and Islamabad become a model for other Islamic countries," Zaidi, who served as chief of Institute of Strategic Studies Islamabad, remarked. There is a lot of room for enhanced bilateral cooperation between the two brotherly nations in economic, trade and defense fields. "I foresee bright prospects for Iran-Pakistan bilateral cooperation in all these spheres," the analyst said.

Jamali called for the removal of impediments to the implementation of mutual accords and adoption of proper measures that would guarantee progress and stability in the region. Security of Iran and Pakistan are linked with each other and the two sides can, given their durable economic ties, present a clear-cut definition relating to their security. He said the Iran-Pakistan-India pipeline project would benefit the three sides and their close bonds would guarantee their interests. He stressed continued consultations between Iran and Pakistan to contribute to the establishment of stability and security in Afghanistan and also the country’s development.

Pakistan has said it is keen to expand bilateral relations with Iran. The Foreign Office spokesman Masoud Ahmed Khan stated that the visit to Iran by the Pakistani Premier is indicative of the fact that Islamabad wanted to boost ties with Tehran, particularly in the economic field. "Pakistan President Pervez Musharraf met his Iranian counterpart Seyed Mohammad Khatami on the sidelines of recent OIC summit, and Jamali`s meetings with Iranian leadership are part of top-level contacts between the two brotherly states," he maintained.

He strongly supported the laying of gas pipeline, saying the other two options—import of gas from Turkmenistan or Qatar—will not be suitable in the given situation. "As compared to Qatar, it will be feasible to import from Iran and because of the security situation in Afghanistan, pipeline laying from Turkmenistan to Pakistan may not be a proper option," he maintained. Turning to the gas pipeline from Iran to India through Pakistan, he said that the project, if realized, not only would generate better economic activity but also lead to creation of job opportunities. On expansion of ties between Iran and India and its probable impacts on Iran-Pakistan relations, he said there is no doubt that expansion of cooperation with India will not leave any negative effect on relations between Iran and Pakistan. "We have tried to help reduce tension between India and Pakistan and normalize relations between the two neighboring countries," he said.

The idea of setting up a common border market was suitable to doing away with smuggling of petroleum products and other items from Iran to Pakistan and vice versa. "There is great scope for a common border market as it will bring both countries closer to each other," he contended. The professor at Pakistan’s premier university believed the construction of a highway along the country’s coastal area will also facilitate access of Iranian products to the port city of Karachi. Due to their geographical proximity, he maintained, Tehran and Islamabad were ideally placed to increase trade and commercial relations much to their advantage.

A noted Pakistani expert and former finance minister said the Prime Minister’s Iran visit can lay a basis for strong bilateral cooperation in the economic field. Sartaj Aziz maintained the Iran-Pakistan joint ministerial commissions, in their regular meetings should pinpoint obstacles and complications if any, to overcome the same and broaden canvass of bilateral cooperation. "It goes without saying that Pakistani members of the cabinet would be discussing ways and means to expand economic cooperation during their interaction with Iranian counterparts." He agreed that keeping in view the historic, religious and cultural bonds, the extent of economic and trade cooperation between the two brotherly countries was not up to a desired level. Relations between the two countries witnessed a major turn-around after the fall of the Taliban regime. There has been a frequent exchange of high-level delegations between the two since then. A weak trade and economic infrastructure is impeding efforts towards enhancement of Iran-Pakistan cooperation. "There has to be harmonization of export and import regimes between the two countries as well as among the other OIC member states for greater economic interaction," Sartaj Aziz said. For harmony, the expert laid stress on greater interaction and cooperation. Communication links, like better road and rail infrastructure is imperative for lessening cost of imports and exports between Iran and Pakistan.