Iran on Monday called for improved ties with neighbouring Iraqi Kurdistan, particularly on the economic front, as the autonomous region's prime minister visited Tehran, media reports said.

President Mahmoud Ahmadinejad told the visiting premier, Nechirvan Barzani, that strengthened relations with Kurdistan could benefit Iraq, the presidency website reported.

"Exploring existing potentials, especially in trade and commerce, can spark a major leap in economic ties between Iran and Iraq," Ahmadinejad was quoted as saying.

"This will help with the welfare and development situation of both Iranian and Iraqi nations," he said.

The website quoted Barzani as saying Kurdistan was prepared for a full expansion of ties, which he said, was of "great importance" to the autonomous region.

Barzani also met with Tehran's top security official, Saeed Jalili, telling him that trade between Iran and his region had exceeded $8 billion, ISNA news agency reported, without providing any additional details.

Jalili, who heads the Supreme National Security Council, insisted on keeping Iran's restive borders with the Iraqi Kurdistan region as peaceful as possible.

"Minor issues should not be allowed to prevent the development of strategic plans," Jalili was quoted as saying.

Iran's western regions, which border western Iraq and southern Turkey, have been the scene of sporadic clashes between Iranian forces and members of the armed Party of Free Life of Kurdistan (PJAK).

Iran has retaliated by shelling PJAK bases in Kurdistan's mountainous districts.

In July 2010, the Islamic republic's Revolutionary Guards launched a summer-long string of operations against the rebels, claiming to have killed more than 180 PJAK members.