Egyptian President Hosni Mubarak stressed on Tuesday that his country was keen to establish good ties with Iran. 

"Contacts between the two countries were going on to achieve progress in relations, as Egypt was keen on establishing good ties with all Islamic nations, including Iran," Mubarak told a group of intellectuals, quoted by the official MENA news agency.

He said that his meeting with Iranian President Mohammad Khatami in Geneva, Switzerland, last December achieved mutual understanding and represented a step toward ushering in a new stage of bilateral ties.

On Jan. 6, Iranian Vice President Mohammad Ali Abtahi said that Iran and Egypt have agreed to restore full diplomatic relations following a 25-year-old hiatus.

"The two countries have decided to restore ties. It's a definite move and right now they are making the preparations," Abtahi said.

Egyptian Foreign Minister Ahmed Maher, however, said that no decision has been made on restoring diplomatic ties with Iran.

Iran severed its diplomatic ties with Egypt in 1980, a year after Cairo inked a peace deal with Israel and gave asylum to Iran's exiled Shah Mohammad Reza Pahlavi.

Relations between the two countries further deteriorated when Egypt supported Iraq during its 1980-1988 war against Iran, but mutual trade and other ties have been improving since the 1990s.

(Xinhua News Agency January 21, 2004)