"As mayor of Tehran, you provided support to Chinese businesses in Iran," Hu said as he gave Ahmadinejad a warm welcome at the start of their meeting, which also included talks on the Iranian nuclear issue.

"Now that you are president, I hope that we will have many opportunities to take the relationship between China and Iran to the next level."

China and Iran have long had close economic ties, especially in the oil and gas fields, and are in negotiations over an energy deal that was tentatively inked in 2004 and could be worth more than 100 billion dollars.

As part of the initial memorandum of understanding, Sinopec, China's largest refiner, would buy 250 million tons of liquefied natural gas over 25 years, which alone could be worth more than 100 billion dollars.

However, despite a series of Chinese delegations going to Tehran, the deal has yet to be finalized.

Ahmadinejad arrived in China on Wednesday to participate in the leaders' summit of the Shanghai Cooperation Organization (SCO), a regional forum that is increasingly being seen as a counterweight to US influence in Central Asia.

The SCO groups China and Russia with the four Central Asian states of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Iran, Pakistan, India and Mongolia are observer nations.

Ahmadinejad's invitation to China for the SCO drew criticism from the United States, which accuses Iran of being the world's biggest sponsor of terrorism.

"Having Iran there as an observer... again runs counter to the idea that this is a group dedicated in part to countering terrorism in the region," State Department spokesman Sean McCormack said in Washington on Thursday.

The hardline Iranian leader raised eyebrows in Washington with some typically feisty comments to the summit Thursday, saying increased cooperation among SCO nations could help "ward off the threats of domineering powers".

On Friday he engaged in some US bashing on the nuclear issue, as the United States has been leading the international push to ensure Iran does not become a nuclear power.

At a press conference, Ahmadinejad sought to focus attention on the fact the United States dropped atomic bombs in Japan at the end of World War II, becoming the first and only nation to use nuclear weapons in anger.

"Pay attention to the fact that Hiroshima is only a few hundred kilometers away," he said, referring to one of the Japanese cities that was bombed.

Ahmadinejad had on Thursday also held a one-on-one meeting with Russian President Vladimir Putin on the sidelines of the summit, in which Iran's nuclear program was one of the main topics discussed.

Ahmadinejad's talks with Hu and Putin come at a crucial stage in the stand-off over Iran's nuclear program, with Tehran remaining non-committal over an international incentives package aimed at enticing it to suspend uranium enrichment.

China and Russia eventually sided with the US, Britain, France and Germany to put the incentive package to Iran on June 6, and on Friday the Chinese president urged the Islamic state to return to the negotiations.

"The proposal put forward by China, Russia, the United States and Europe has provided a new opportunity for the settlement of the issue," Hu told Ahmadinejad in a dispatch carried by the official Xinhua news agency.

"We hope the Iranian side will earnestly study (the proposal), positively respond and seek an earlier resumption of the nuclear talks," Hu said.

The tabled offer, however, makes no specific mention of potential UN Security Council sanctions, as the United States had hoped for.

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