Iranian President Hassan Rouhani met Oman's leaders in Muscat on Wednesday during a visit aimed at boosting ties and easing tension with other Gulf states, including regional heavyweight Saudi Arabia.
Starting his two-day visit to Iran's long-time Gulf ally, Rouhani went straight into a meeting with Sultan Qaboos, who has acted as an intermediary between Western countries and the Islamic republic.
The two leaders discussed "bilateral cooperation" and "building good relations", Oman's official ONA news agency said.
Before leaving Tehran for Muscat, Rouhani had called the visit "of great importance to strengthen relations between Iran and Islamic countries, especially those neighbouring Iran".
"The Strait of Hormuz gives countries south of the Persian Gulf and the Arabian Sea great importance," Iran's official news agency IRNA cited him as saying.
Iran's elite Revolutionary Guards unit is tasked with protecting the country's waters in the strategic strait, at the entrance to the Gulf, a key gateway for global oil supplies.
Omani Foreign Minister Yusuf bin Alawi said Rouhani's visit "reflects the confidence" that exists between Muscat and Tehran, who are both "convinced that the top priority is achieving real stability in the region".
"We seek to strengthen this cooperation to serve and bring closer together all (countries) in the region," the Oman daily quoted Alawi as saying.
Rouhani has pledged to improve relations with Iran's Arab neighbours in the Gulf since his election last year.
His foreign minister, Mohammad Javad Zarif, visited four Gulf states in December and voiced readiness to visit Saudi Arabia, which however remains cool to the idea.
Relations between Shiite-majority Iran and Sunni-ruled Saudi Arabia have long been strained as the two countries vie for regional dominance.
Such strains have been accentuated by Tehran supporting for Syria's President Bashar al-Assad, with Riyadh backing the rebels trying to topple him.
Tehran's support for Assad has also made several other members of the oil-rich Gulf Cooperation Council wary of their regional neighbour.
The GCC is dominated by Saudi Arabia and includes Oman, which however has remained cautious in expressing a position on the political turmoil that has engulfed the region since 2011.
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Alawi said his government is "in contact with both sides and we are not biased towards one party or another" in the Syrian conflict, which "does not directly affect us".
- We reduced distrust: Oman -
The sultanate's circumspection has earned it respect as a mediator, highlighted by its hosting of secret talks between Tehran and Washington before the signing in Geneva last November of an accord between world powers and Iran on its nuclear programme.
Alawi said Oman had "played a role in the rapprochement between the West and Iran", adding that his country had helped "reduce distrust".
He expressed confidence that "both parties will continue" talking until they resolve their differences.
World powers suspect Iran's uranium enrichment programme has the ultimate aim of developing a nuclear weapon, despite repeated denials.
Talks are continuing between Iran and the major powers aimed at hammering out a lasting nuclear accord that satisfies all sides.
"Oman and Iran are satisfied with the progress in negotiations," Alawi told reporters after meeting his Iranian counterpart and Rouhani.
Rouhani, who also met Oman's top cleric Ahmad al-Khalil, is scheduled to meet members of the business community on Thursday.
"During this trip, we want to implement contracts in the field of trade and economy, especially those linked to oil and gas," as well as in finance, banking, and culture, IRNA quoted him as saying.
Tehran's ambassador in Muscat, Ali Akbar Sibeveih, said Oman and Iran are seeking to expand trade, which reached $1 billion last year, as well as bilateral investments which they expect will top $10 billion by the end of this year.
The two sides signed an "initial agreement" to construct an undersea pipeline shipping gas from Iran to Oman, oil minister Mohammad al-Ramahi said.
Rouhani is the second Iranian leader to visit Oman since the 1979 Islamic Revolution. His hardline predecessor Mahmoud Ahmadinejad visited in 2007.